The HR department provides human resource management services for the employees and the company. Duties an include recruitment and selection processes, pay systems, policy development and management, training and development programs as well as affirmative action programming and humanistic services. HR departments also allow employees to file complaints, classify jobs, and engage in manage of policies.
Non-revenue generating activities and departments can be a high frustration level for most small to medium sized businesses. Payroll and human resource management plus benefits and compensation are important to keep employees, but entrepreneurs can spend up to 40 percent of their day engaged in these non-revenue producing tasks.
To handle the day to day tasks for human resources, growing companies are looking to outsource their HR departments to one of the 700 professional employer organizations in the U.S. These companies become the legal part of your staff and handle payroll, HR functions and benefits, recruiting, training and employee relationships.
In small companies the owner is the most productive part of the business. Yet small businesses can be too focused on HR responsibilities. It becomes imperative to outsource the HR department and get their main focus back to services, goods and making money. It makes sense to hire an outside HR firm, but first ask these questions:
How big is our company? Are administrative processes breaking down the productivity of our firm? If so, now is the time to outsource HR.
Most outside HR companies prefer not to work with a company that employs fewer than 10 employees. When a company is small, it is more cost effective to have a small an in-house HR department. Ten employees or less can be handled by a department that does all the payroll, benefits and employee issues. When your company reaches about 20 to 100 people and the composition of your workforce demands recruitment and personalization, now is the time to outsource.
Most HR outsourced companies price their services depending on the company. Costs can range from about 2 percent to 10 percent of each employee’s annual wage. Gage hiring an HR company by looking at the expense per employee. Outsourcing can run between $100 and $150 per employee per year. Calculate out the expense to determine if outsourcing is right for you or if you should retain the services of an HR director and staff.
How much control do you want over HR functions? You can control all aspects of a business or be open to suggestions and recommendations of an outside HR department. You will lose flexibility in the coverages you offer, but the cost savings can be worth it. Use an outsourced HR department that is listed with the Employer Services Assurance Corporation and has experience in your industry.