6 Questions Answered About HR Outsourcing

In today's business world, HR outsourcing is becoming more popular as a method for companies to enhance HR efficiency and focus on their main tasks. As interest in this strategy grows, so do the questions about how it works. This article tackles the six most frequently asked questions about HR outsourcing, providing clear and simple answers.

1. What is HR Outsourcing?

Outsourcing HR allows employers to step away from the complexities of managing HR tasks and focus on core, revenue-generating activities. Partnering with a service provider like a PEO ensures expert management of tasks like payroll, employee benefits, and more.

This helps company leaders and personnel save time that would otherwise go towards important but distracting tasks. It also means that the employer can benefit from service provided at economy-of-scale pricing delivered by subject matter experts. Resulting in a better HR experience at a lower cost.

2. Which HR tasks can companies outsource?

Either separately or in tandem, companies can outsource any element of HR. Some outsourced services specialize in specific applications, like payroll or recruiting. Others, like PEOs, can do it all under one roof or offer specific services piecemeal.

When outsourcing HR functions, it's important to think past transactional HR like payroll, benefits management, compliance, and risk management. Additionally, consider including strategic HR as well. This further enhances your ability to align human resources with overall business goals.

Can the HR provider help ensure that your HR activities align with and contribute to achieving bigger business objectives? By asking this question, you ensure that your choice to outsource HR is guided by both your current business needs and what you aim to achieve in the future.

3. What factors can affect success with outsourcing?

Above all else, it’s important to find a good outsourcing partner. This can frankly be challenging, and it’s important not to make snap decisions based on cursory research. Look for reputable providers and definitely ask questions. For example:

• What kind of Service Level Agreements (SLAs) do they provide?
• How flexible are their contracts?
• What method is used to deliver service (on-site, online, or phone)?
• Will they commit an adequate amount of time and resources to the services they provide?

In addition to finding a reliable HR outsourcing company, it's important to define expectations. This involves making sure everyone has a complete understanding of the intended service expectations. Making sure everyone’s on the same page upfront will decrease confusion and facilitate successful outcomes over the long haul.

4. Will I lose control of my business?

Not at all, find comfort in knowing your control remains unaffected! A PEO essentially becomes the employer of record when dealing with issues like payroll taxes. However, it plays no role in the actual management of employees or in the decision-making process of the business.

Outsourcing partners have exclusive limitations to the services they provide as defined by their service agreement. They cannot exceed or fall short of these defined terms. You still have full control over the daily operations of your company. Outsourcing HR functions simply allows you to focus on core business activities.

5. Will outsourcing just create more work for our team?

This is a common fear of human resources outsourcing. Business owners are afraid that the partner will just end up making more problems and more work for the company. This comes back to choosing the right partner for your needs. Selecting the right HR provider can lower your workload and result in improved outcomes for employee recruitment, retention, and satisfaction.

6. Can I keep existing HR personnel or partnerships?

This all depends on the HR partner you choose. Some partners may expect to cover all of your business needs. While others may be more flexible and work with existing relationships. This is definitely something to ask about if it’s an area of concern.

In many instances, you should be able to negotiate a service agreement that aligns outsourced services with existing commitments and relationships. In fact, outsourcing certain time-consuming HR tasks often allows internal staff and other partners to focus solely on their most important tasks. This opportunity allows employees to dedicate their attention to more critical and higher-priority responsibilities.

Key Takeaways

This look into HR outsourcing answered some of the most common questions revolving around outsourcing. Outsourcing HR functions can allow businesses to focus on important core activities. Working with HR experts like a PEO ensures efficient handling of tasks like payroll and benefits, saving both time and costs.

A key consideration when outsourcing HR is how the functions align with your business goals. Further, align your HR with your business goals by integrating strategic HR when outsourcing. Moreover, we address concerns that outsourcing might involve a loss of control. A PEO will become an employer of record without engaging in employee management or decision-making. 

Communication and expectation setting are essential. Outsourcing HR requires a trustworthy partner and a clear understanding of how service agreements align with existing commitments. This reduces fears about more work and helps HR outsourcing complement your business.  

Remember, flexibility varies with your partner. However, negotiations can lead to agreements that align services with your plans. In short, HR outsourcing streamlines work, lets you focus on goals and can be a great move for your business. 

CoAdvantage, a leading Professional Employer Organization (PEO), dedicates itself to growing small and medium businesses. Our PEO services revolve around full-service HR outsourcing solutions such as benefits administration, payroll, and more. Don't miss the opportunity to benefit from simplified HR, connect with us today to learn more!