A look at the advantages of outsourcing your HR services

When companies choose to outsource their HR services, they create opportunities to focus more intently on issues that matter to employees, says Cheryl Cooper Perez, President and Director of Sales at Benefit Innovations Group.

They are no longer burdened by the many administrative responsibilities that employers must manage in order to hit the moving target that is HR compliance.

“When you can outsource that task to an expert who is on top of these frequent policy changes, you reduce your risk of being out of step with the latest rules and regulations that govern employers,” Perez says. “You’re now able to focus more closely on the well-being and experience of your employees and what you can do to build a stronger culture in your company.”

Companies that decide not to utilize a trained professional and instead rely on the CFO, office manager or other position to handle HR duties may not be aware of the risk this move creates for their organization.

Smart Business spoke with Perez about why outsourcing has become a valuable tool to help companies manage their HR responsibilities.

What are some of the key functions an HR service provider can perform?
Employers can face an enormous variety of challenging HR circumstances, including job terminations, family medical leave, paid time off, employee theft, harassment and many other worrisome issues.

When these situations arise, an employer who has failed to create and clearly communicate company policies can face significant fines and penalties. HR service providers possess both the experience and the expertise to ensure you have effective and legally compliant policies in place before these situations occur. In Ohio, a business’s employee manual is often the basis by which employment law cases are analyzed.

Without clear, up-to-date and shared documentation of company policies and procedures, the employer is greatly disadvantaged when a challenge inevitably takes place. Partnering with an HR expert helps to eliminate the risks associated with outdated, noncompliant or even nonexistent company guidelines.

In addition, an HR service provider can ensure that proper procedures and documentation are in place to fully comply with complex legal regulations surrounding issues such as immigration/employment eligibility, Affordable Care Act (ACA) reporting, the Employee Retirement Income Security Act (ERISA), disciplinary procedures and more.

Without a knowledgeable and trusted HR partner in an employer’s corner, these demands can seem cumbersome or even overwhelming.

How do you determine which HR services you want to outsource?
Typically, an HR service provider will do a comprehensive assessment of current processes and procedures in your company to get a sense for where you’re at and which parts require attention. The most important thing in these initial meetings is to bring someone to the table that is involved in day-to-day operations, as well as a decision-maker, so you can create a plan and either choose to move forward or consider other options.

One of the benefits of outsourcing paperwork and administrative HR functions is that it provides more time to interact with employees and address concerns that might otherwise be left to fester. You can maintain those relationships and continue to use an internal person as the primary contact for employees.

What are other key points to keep in mind?
The best relationship with an outsourced HR partner is one in which you develop a customized plan that meets your needs. HR doesn’t have to be overwhelming and it doesn’t need to be expensive. While a true HR professional can earn as much as $80,000 a year, when you outsource HR services, you can often get everything taken care of for less than half of that cost.

These are people whose job is to continuously be aware of legislative updates, as well as the latest strategies, cutting-edge solutions and technologies to create a very strong HR department for each business. Just as you outsource your IT needs to an expert, the same philosophy can be applied to HR.

Insights HR & Consulting is brought to you by Benefit Innovations Group