The Benefits of Outsourcing HR
One of the major benefits of efficiency-driving business technology has been the ability to digitize, organize, and use pre-filled templates for large volumes of paperwork that used to have to be done by hand. Because much of an HR department's workload deals with staying in compliance with various laws and regulations for your business, modern HR services technology can help to automatically select the needed forms for most HR needs.
Some of the best providers of these outsourced HR services are payroll HR providers such as ADP, Paychex, Paycor, and Zenefits. Because their business as payroll providers already required them to understand compliance issues for all the industries and clients they provide those services to, it gave them an easy move into the outsourced HR services industry.
If you already use one of these services for your payroll, choosing to outsource HR functions to them as well can lead to significant cost savings and improved productivity. This move could save the cost of maintaining an in-house HR department, and streamline several operations under one roof (payroll and HR services).
Assessing Your HR Needs
Every company is unique based on its size, industry, business model, growth trajectory, and other factors. This makes it crucial for any business leader to assess the HR needs of their company before deciding to outsource HR functions. To ensure the right provider is selected or decision is made, these (and other) questions should be asked:
The answers to these questions will help to guide you toward the HR services that best suit your business.
Selecting the Right Provider
Once the decision has been made to outsource operations to a payroll HR provider, care should be taken to select the one that best fits your company's needs. A good provider should offer a suite of HR services, such as:
The major payroll HR providers are well-known for their comprehensive HR solutions, excellent customer service, and robust technology platforms that are simple to use and understand. Consider what services your company needs, and review each provider to ensure their costs, customer reviews, and offerings align with what you are looking for before you make a final decision.
Cost Considerations
Choosing to outsource HR functions can result in substantial cost savings in the long run, but it’s crucial that you understand the total financial impact before you sign a contract. Most providers of outsourced HR services cannot provide a direct line-by-line standard pricing quote, as the size and needs will be specific to the company.
Once you find providers that align with what you need, reach out to speak with someone from their team directly. They can walk you through what they offer, and what they think would be best for your specific needs. Once you know their offerings, consider the overall costs of the service, any additional fees that may be charged, and what it will cost your business to transition to the new provider.
Keep in mind that not all costs are financial. Weigh these calculations against the potential time saved, higher efficiency with fewer errors, improved compliance, and access to experts & technology that you may not have previously had.
Don't Forget the Basics
HR fills a specific need within a company, so it’s important that any payroll HR provider that you consider outsourcing your operations to understands what your company needs. Some of the “table stakes” that you should ensure a potential HR services provider has are:
A necessary question that must be addressed is the speed at which they will respond to any questions or issues that may arise after your company outsources its HR services to the provider, and who from their team will respond. When discussing their range of services, customer service and expected time for assistance should be a core consideration, especially during the transition process.
Reviewing the Best Providers
HR services are a necessary component of any company larger than one person, so you want to make sure that you choose a reputable provider. Technology has allowed many low-cost operations to pop up out of nowhere, but you don’t want to be stuck with a “fly-by-night” operation that goes out of business with all of your data.
Below is a list of some of the top companies in the payroll HR providers industry, each of whom has experience working with companies of all sizes and in many different industries:
Aside from the basic questions listed above, there are unique needs for your company that can help you determine which from this list of HR providers may be right for your needs. Service needs that may differ amongst companies or industries may include questions about:
Additional services that may be needed or beneficial to your company could include:
Choose a Provider That Aligns With Your Company
The financial aspect may be the core reason that you’ve considered outsourcing your HR services, but remember that some non-financial aspects can also have a great impact on your business or company culture. Do your due diligence to look into each company that makes it to your shortlist, speak with their representatives, and do whatever you can to get a good feel for the provider as a whole.
HR services are one of the few forces that will touch every employee of your company in some way or at some time, so you want to make sure that the chosen provider is a good fit. It may be difficult to quantify as this isn’t something that can be calculated on a spreadsheet, but if your company culture or employee happiness is important to you, it may be wise to take the time to ensure alignment.
Conclusion
The decision for a company to outsource HR services can have an enormous impact on its financials, efficiency, reduction in mistakes, and keeping up with compliance issues. If you’re considering this decision, use the points outlined above to ensure you find the right fit for your company’s HR needs.
