Brandon Carl, our Business Development Manager, chatting about Human Resources outsourcing and GHRO with Ciaran Foley on LookSee.TV!

2010-08-10 Brandon Carl and GHRO Discuss Outsourced HR from Ciaran Foley on Vimeo.

The astronomical cost of health insurance and related benefits is forcing small and mid-size businesses to cut back on full-time employees. However, in order for companies to continue meeting productivity goals, stay competitive in today’s marketplace and remain profitable, they are turning to Human Resources Outsourcing as a solution to offset the rising cost of employee benefits.

Due to soaring medical costs, it is now estimated that employee benefits make up approximately 30 percent of the total employee compensation dollar. As a result, the days of employers offering first dollar health coverage are long gone.

Presently it is more likely that employers will offer options such as employee contribution, co-pays, deductibles and co-insurance as part of their benefits packages. Yet during these troubled economic times the price tag of these measures is still too high for many small and mid-size companies.

When a company turns to human resources outsourcing as a solution and hires a Professional Employer Organization (PEO) to assume the responsibility of employee benefits, they are able to provide competitive benefits packages while saving a substantial amount of money. This is because many insurance carriers offer PEO reduced prices for employee benefits while offering a full range of healthcare plan options.

By offering comprehensive employee benefits packages, smaller companies are better able to attract, recruit and maintain more qualified employees.

PEO’s not only help small businesses with employee benefits but also assume many other HR responsibilities including:

• Employee/Labor Relations
• Employee Leasing
• Government Compliance
• HR Audits
• HR Consulting
• Safety and Worker’s Compensation

Many small and mid-size companies are finding that by outsourcing their recruitment, HR management and other services that a PEO provides they can expand their core business with greater success.

By leaving the HR management to experts who have years of experience in not only finding a skilled labor force, but also in training and maintaining them, small and mid-sized companies can focus on productivity and growth while cutting costs at the same time.

Smaller companies affected by the present economic climate face more challenges than their larger counterparts. Studies have found that small business suffer more in a bad economy and show lower overall sales than the bigger and more widely recognized companies who rely on their brand name to get them through the tough times.

The fact that lenders have also tightened their purse strings where small businesses are concerned does nothing to help matters. So if it’s sink or swim, how does a small business stay afloat?

The answer to this question is to apply some sound business strategies that entrepreneurs have used during eras of great prosperity as well as throughout the leaner years.

Sound Business Strategies for Small Businesses:

Market like a pro

By taking advantage of mainstream media, which today includes popular communication platforms such as the Internet, mobile marketing and social media, small business can compete with larger brands.

Manage your time and money effectively

By hiring a Professional Employer Organization small businesses are able to cut cost as well as free up their time to focus on the productivity and expansion of their core business.

Keep a staff of well qualified employees

By utilizing a PEO to recruit and manage a sufficiently skilled work force small business can compete in today’s highly technical and quickly evolving marketplace.

Streamline

By reducing waste, multi-tasking and raising efficiency small businesses can step up productivity while slashing their overhead down to a fraction of previous operating costs.

Forecast

By researching trends and focusing on what the marketplace will be responding to in the near future companies can get in on the ground floor and stake their claim to innovative new products and services.

Deliver

By producing and delivering the best products and services possible a small business will build their brand as well as develop something there is still no substitute for; a reputation for excellence.

Turning things around for small businesses and making them more competitive in a difficult marketplace is what outsourcing HR services is all about. Hiring a PEO will provide a small business with the ability to implement the sound strategies that have been the cornerstones of success for many savvy entrepreneurs during both good and bad economic times.

PEO Services Include:

•    Benefits Outsourcing
•    Employee benefits
•    Employee/Labor Relations
•    Employee Leasing
•    Government Compliance
•    HR Audits
•    HR Consulting
•    HR Management
•    HR Outsourcing
•    Payroll Services
•    Recruitment Services
•    Safety and Worker’s Compensation

Saving a small business that is in trouble is not an easy endeavor. However, with the help of a team of experienced professionals most small businesses can find success even in an ailing economy.

Human Resources outsourcing can be extremely profitable for businesses if the process is implemented correctly and managed properly. However, there are many misconceptions about the transition into utilizing HR outsourcing as a standard practice.

Some of these common misconceptions include:

•    Outsourcing means all risks are passed on solely to sub-contractor.
•    Outsourcing means companies no longer share responsibility for paying out benefits.
•    Outsourcing means functions are independent entities and no longer require expert management.

The benefits of outsourcing are the reasons organizations large and small are opting to outsource many of their functions.

These benefits include:

•    Reduced Costs
•    Elevated Levels of Efficiency
•    Generated Income
•    Entering Into New fields of Technology , Research and Development
•    Greater ROI, Customer Satisfaction and Share-Holder Value
•    Increased Flexibility

These advantages are currently driving the popularity of outsourcing. More and more, companies are transforming their models to incorporate HR outsourcing into their business strategy.

In order for organizations to move beyond the outsourcing for routine administrative functions such as annual benefits enrollment, recruiting, employment processing, healthcare administration and retirement plan administration into more comprehensive outsourcing practices, they are looking for providers of expert management services to avoid the many pitfalls of an inadequate outsourcing structure.

This is why large corporations and mid-sized companies as well as smaller business are finding that a professional employer organization (PEO) is the safest and most secure way to maintain successful HR outsourcing.

PEO service companies share the human resource management responsibilities and provide expert administrative functions to ensure the outsourcing relationships between companies and contactors are streamlined and operating smoothly.

PEO services also enable businesses to offer enhanced benefits packages which elevate the level of efficiency and attract more qualified recruitment possibilities.

A Professional Employment Organization will relieve the burdens of employee/labor relations, government compliance, HR audits, safety and worker’s compensation, employee development, training and much more.

When deciding to utilize HR outsourcing, companies understand that by hiring a PEO for expert management they are able to focus on their core business, productivity and profit margin.

Currently there is a significant spike in the employers who have less than 25,000 employees choosing to outsource human resources. These companies have found that there are many benefits of using a professional employer organization (PEO). Among the top three reasons medium-sized businesses are incorporating HR outsourcing into their strategy is they are able to remain focused on their core business, operate more efficiently and cut costs.

More companies are deciding they no longer want to place capital expenditures solely onto their own human resources and are opting instead to outsource to stay competitive.

In the last ten years outsourcing has become more popular among companies who want to expand but want to control costs by eliminating full-time in-house positions that don’t directly make a significant contribution to the bottom line.

Human resource outsourcing has become a viable strategy and is growing rapidly in the United States as well as overseas. Companies that have made the decision to outsource HR find that they are receiving a higher quality of expertise at lower costs which improve their bottom line.

Another shift taking place is being made towards selective outsourcing. Companies are beginning to use multiple vendors and are only choosing to outsource specific departments and job functions.

However, using multiple vendors requires management to become more adept in contract management as well as to become more knowledgeable in service costs, standardization and detailed protocols when dealing with external providers.

As HR outsourcing is becoming increasingly popular, managers are looking for guidance and information to help them make their decisions about recruitment services and how to find the right professional employer organization.

The following are some of the benefits of using a professional employer organization (PEO) for the outsourcing process.

•    A PEO will enable companies to effectively outsource the management of human resources, risk management, employee benefits, payroll, workers’ compensation, training, development and other services.

•    A PEO will perform extensive searches for qualified candidates with expertise in a required field such as technology or programming.

•    A PEO will reduce legal liabilities such as safety and worker’s compensation, employee/labor relations, government compliance and other regulatory processes involving human resources.

•    A PEO will often offer more attractive benefits packages and attract employees with a higher skill set.

HR outsourcing has become more common in recent years because it is a very effective way for companies large and small to contain costs, reduce administrative burden and minimize risk.