The human resources department is an essential part of any business. This team oversees talent management, runs payroll, handles employee benefits, coordinates training programs, and generally keeps things moving within an organization.
However, not every small business has the budget or resources for a full-time HR manager. That's where HR outsourcing comes in.
HR outsourcing services allow your business to outsource a variety of tasks, including benefit administration, training, recruiting, hiring and payroll. These HR solutions are ideal for companies of all sizes that don't have the resources to hire or expand an in-house HR staff, or if the current staff is buried in work and needs options for decreasing their workload.
The human resources outsourcing services in our buying guide all offer hands-on HR outsourcing to help your company handle any sort of HR task, from the simplest to the incredibly complex. Check out our recommendations for HR outsourcing firms below, including our best picks for different business use cases.
Employee training is an important tool for keeping your workforce and company competitive. HR outsourcing companies can create custom plans for your company’s needs to help you train and develop the best employees. They can also provide performance management plans to help workers who have fallen off track to catch up. G&A Partners is the best example of a service that offers training and performance-boosting guidance.
Over the years, the role of HR professions has evolved from record keepers and paper pushers to an essential part of a business's executive team. In addition to serving as the central hub for employee activities, human resources departments provide vital support for your staff through conflict resolution and training, helps with budget management, and ensures that your company is compliant with employment laws and regulations.
HR is responsible for maintaining the security and privacy of human resource data, including confidential employee information regarding compensation and personal matters. This department also must ensure your company's compliance with federal regulations surrounding health care, 401(k) plans and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA).
Another important function of HR is to ensure your company follows legal processes when hiring, especially when hiring noncitizens. Immigration compliance at both the state and federal level is a complicated process that your HR staff may not have expertise in. If your company frequently hires immigrants, it is important to find an HR outsourcing service with experience in immigration services. This helps to protect your company against unintended violations of immigration law, which can be extremely costly.
Many companies forgo hiring HR staff in their initial years. However, this is a risky decision. When you do not have a human resources manager, your company is more liable for lawsuits. Your employees do not have a neutral party to discuss issues with, nor is there a specialist ensuring that all your hiring paperwork is appropriately completed. The reality is, you can't afford not to invest in human resources. An outsourced HR service can help you meet all your company's human resources needs, even if you're on a limited budget.
HR outsourcing services typically follow one of two pricing models:
Regardless of which model your chosen HR outsourcing firm uses, your total cost will vary depending on how many employees you have, where you operate, and the number and complexity of services you need. Some companies also offer a la carte services if you only need to outsource one or two specific functions, like payroll or health insurance.
Full-service human resource outsourcing is a good option if you own a small company and cannot yet afford to hire HR personnel. It is also a good option if you have staff in different parts of the world and need HR staff to work with remote employees. By outsourcing these services, a company ensures that it remains in compliance while working with employees and can provide a healthy working environment.
When companies skimp on HR, they put themselves and their employees at risk. A full-service HR company can help you appropriately manage day-to-day HR tasks like reporting misconduct, ensuring work safety compliance and coordinating insurance benefits. They can also work closely with your payroll team to handle compensation. In addition to day-to-day tasks, you can request services like recruiting and employee training.
If you have no HR or an inexperienced HR staff in your company, full-service HR outsourcing is probably your best option. It provides the resources of a full HR staff to oversee your company's needs without the expense of hiring a whole team.
Partial outsourcing is a good choice for companies that have HR staff but need extra help. For example, maybe you have an HR representative to handle hiring and ensure that employment paperwork is correctly filed. However, HR is more than compliance and staff support. It can be an important resource for employee training and development. If you do not have the resources or desire to hire a full-time training specialist, you can outsource this service.
The most common trainings that HR outsourcing services provide include software and processes training, though other options are available. The best HR outsourcing service will work with you one-on-one to determine the training that's best for your company's employees.
Other common partial outsourcing services include payroll outsourcing, employee screenings and background checks, employee recruitment, and immigration compliance. If you have a small HR staff that is burdened by workload or inexperienced in certain functions, like immigration paperwork, then partial outsourcing is the best solution for your company's HR needs.
The HR outsourcing service that your company partners with should give you the option to select a full-service package or pick and choose which services are best for your business right now. It should also have expertise in employment compliance to protect your company against penalties or lawsuits. Each service in this buying guide offers comprehensive packages to assist your company with its HR needs so that you can focus on other tasks pertinent to your business' success and growth.
In your research on HR outsourcing, you may have come across another term: professional employer organizations. While many of the companies we reviewed offer both HR outsourcing and PEO services, they are not exactly the same thing.
The main difference between HR outsourcing and PEO is the legal employment arrangement. When you outsource your HR functions, you are still the employer of record for your staff members, and you retain full control of your business operations and data. With a PEO, the company you hire acts as a co-employer and is responsible for all HR responsibilities, including hiring and firing, employee training, tax and compliance obligations, and more.
Whether you use HR outsourcing services or a PEO depends on your business's needs. If you just need help with a few basic administrative tasks like payroll and benefits management, an HRO provider might be your best option. If, on the other hand, you'd rather have an expert shoulder the full legal and financial responsibilities of employing staff members, you'd be better off hiring a PEO.
Software as a Service, also known as SaaS, is the new wave of software solutions revolutionizing practically every area of business. Human Resources Management Systems (HRMS) or Human Capital Software (HCM) have been used by HR professionals to organize functionalities like recruiting, payroll, benefits, and more. According to Deloitte’s “Managing Talent Through Technology: HCM Buying Trends in 2013,” 61% of HR professionals plan on replacing their HCM software this year in favor of SaaS solutions that not only provide badly needed updates, but new features that support the needs of modern businesses.
I think people that choose one of the big guys do so because they are a known quantity. The smaller companies don't have as many reviews, and in some cases, can't provide all the services that are needed. They don't know what they are missing, as many clients go back & forth from ADP to Paychex because of problems. Our cloud based solution combines a powerful payroll & a web-based HR application along with the convenience of services typically offered by payroll outsourcing providers. ...
Read More ▼The only advice I have is if you are going to use the HR solution to handle your payroll make sure you handle your taxes unless the company you select is Public and you can see their financial status. There are hundreds of web based HR and payroll solutions on the market and if they fail to file and pay the payroll taxes the business owner is personally liable.
Read More ▼Hi Maxine, I've heard good things about Zirtual (https://www.zirtual.com/) for hiring virtual assistants. What I like about Zirtual is that you don't have to hire a full time virtual assistance, you could hire a VA for as little as 3 hours a week and then adjust your plan if more hours are needed. This could be a plus for your business if this is your first time hiring a VA, and you are unsure of the amount of work you will require from them. Zirtual also guarantees a match with a...
Read More ▼Also remember that benefits are not just insurance. I've worked at companies that do random prize draws, group dinners out, offer free services (like help quitting smoking, inexpensive daycare) or college tuition assistance. Free coffee is good, too.
Read More ▼Becca, First you need to consider if you are willing to walk away from this opportunity if the salary does not meet your requirements or if this is a must have position. Obviously if it is a must have position the negotiation becomes more difficult for you. Before you begin negotiating you need to determine industry rates, what is the minimum salary you are willing to accept and what benefits do you require. Once you receive an offer you need to ensure it includes salary, benefits,...
Read More ▼Well, we at VKW provide Virtual Assistants and have done extensive research on your question. I'm the Founder of VKW, so this might come across as bit of self promotion. I hope other chime in, so you get a balanced response. You can hire a Freelancer, which means you need to act as your own HR Generalist and evaluate the skill set, background check, and compatibility with your work-style/character. Many people do get frustrated with that part. However, if you find the right person, it would...
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