Why Outsource Your HR? While no entity can cure all employee-related headaches, human resources (HR) outsourcing companies can remove the administrative responsibilities that come with managing your employees. Ideally, HR outsourcing firms free your time so you can focus on your business. small to medium- The Small Business Administration (SBA) estimates that business owners of sized businesses spend up to one-fourth of their time on employment-related paperwork. Outsourcing even a portion of your company s HR administrative duties can add hours of potentially productive time to your week. Access to experts well-versed in all aspects of employee recruitment, retention and management can solve many problems. Professional HR companies can also give you access to better health benefits, reduce your payroll and accounting costs, help in recruiting new employees and provide more comprehensive retirement benefits. 25% Amount of time small to medium-sized businesses spend on employmentrelated paperwork. Above all, outsourced HR companies make sure you stay compliant with ever-changing federal and state regulations. Think about it how often do you brush up on your state s laws? Beyond reducing liabilities and getting better cost savings, more business owners are finding that HR outsourcing companies increase their efficiency overall. According to a poll conducted by the Society for Human Resource Management (SHRM), the top areas of outsourcing expected to increase the most during the next few years include: 65% 52% 52% 46% 39% Background/criminal background checks Employee assistance/counseling Flexible Spending Account administration Health care benefits administration Temporary staffing 02
The survey found that nearly 90 percent of respondents were very satisfied or somewhat satisfied with their current outsourcing arrangement, and 33 percent anticipate that their organization will increase the level of HR outsourcing over the next five years. Only 17 percent responded that they expect their level of outsourcing to decrease. 90% Respondents who were very satisfied or somewhat satisfied with their current outsourcing arrangement. 33% Anticipate that their organization will increase the level of HR Outsourcing over the next five years. Managing employees, keeping up with state and federal laws and handling a myriad of other administrative duties is part of running a business. Unfortunately, these tasks can take you away from other important matters that help grow your company. If managing these duties is a drain on your time, energy or bottom line, outsourcing some or all of your HR practices may provide the relief you need to get back to the business at hand. 03
Your company would probably benefit from working with an HR outsourcing company if you re constantly struggling to: Offer comprehensive benefits. When you outsource your HR, you can offer more comprehensive and less expensive benefits to employees and applicants since you ll be joining a larger group through the HR outsourcing service. Thanks to the overall buying power that many HR outsourcing companies hold, benefits such as health insurance, retirement plans and worker s compensation may come at a much larger cost savings to you. Benefits such as tuition reimbursement or adoption assistance may also be offered when employees are co-employed through an HR outsourcing service. Though your business may still be growing, a partnership with an HR outsource company can position you to act like a larger company. Comprehensive employee benefits can help you attract and retain top talent, ensuring that you ve got the best team in place as your business operates and expands. What is co-employment? The National Association of Professional Employer Organizations defines co-employment as the contractual allocation and sharing of employer responsibilities between an HR outsourcing company, otherwise known as a PEO, and its client. Handle general HR administration. Each moment spent compiling payroll or on hold with the health insurance provider is a moment not spent growing your business and generating revenue. Decreasing administrative responsibilities often viewed as busy work is a quick way to increase productivity. Paperwork often bogs people down and prevents them from spending their time wisely. Capture more of your time and direct it to growing your business. Keep up with changes in employment law. Every company has to abide by certain state and federal laws when it comes to HR. But exactly what those laws are and how they might differ between jurisdictions is not always clear to the individual business owner. As the number of employment laws and regulations increased by nearly two-thirds from 1980 to 2000 according to the SBA, more and more companies are opting to shift the burden of employee administration to an outside source. Many of the larger outsourcing companies offer clients regulatory assistance, helping them through the often cumbersome process and ensuring the business is in full compliance. Manage liability. Just one lawsuit from an employee can force your business to go belly up. With some outsourcing companies, a co-employment relationship is created where both the business owner and outsourcing company employ the staff. In an HR outsourcing relationship, the outsourcing company may have a comprehensive employer liability management program, taking on much of the risk for any employment-related legal issues and giving the business owner peace of mind. 04
To find out more or learn how Insperity can help your company, call us at 800-465-3800. Visit us at Insperity.com About Insperity Insperity TM, a trusted advisor to America s best businesses for more than 25 years, provides an array of human resource and business solutions designed to help improve business performance. Insperity Business Performance Advisors offer the most comprehensive Workforce Optimization TM solution in the marketplace that delivers administrative relief, better benefits, reduced liabilities and a systematic way to improve productivity. Additional offerings include MidMarket Solutions TM, Performance Management, Expense Management, Time and Attendance, Organizational Planning, Recruiting Services, Employment Screening, Retirement Services and Insurance Services. The information contained in this document is for general, informational purposes only and is not intended to be legal advice. This information is not a substitute for the guidance of a professional and should not be relied upon in reference to any specific situation without first seeking the advice of a qualified HR professional and/or legal counsel regarding applicable federal, state or local laws. Insperity and its employees make no warranties, express or implied, and make no judgments regarding the accuracy of this content and/or its applicability to a specific situation. A reference or link to another website is not an endorsement of that site or service. 05 MKT-W12-507