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What Do Small Employers Get When They Outsource HR?

CoAdvantage-The employment marketplace is facing incredible challenges – labor shortages, the so-called Great Resignation, huge changes in workplace policy thanks to the pandemic, the acceleration of technological changes like increased automation, and more. Employers are struggling to find, recruit, train, and retain qualified labor; and business owners are more pressed for time than ever, struggling to oversee administrative, back-office functions while simultaneously focusing on growing their businesses. Human Resources Outsourcing (HRO) can help.

How does HRO help?

Across industries, finding and retaining skilled workers is harder than ever. The pressures of the pandemic, rising wages, employee dissatisfaction, and more are combining to create a lot of instability in the labor marketplace. The most important thing employers can do is ensure they’re stringently following recruitment best practices and that they create a good working environment that’s attractive to workers and fosters loyalty and engagement. Simultaneously, they also have to ensure they’re complying with all applicable regulations.

HRO can help with all of this, from start to finish. HR vendors can help organizations to find and hire the best performers for your company, even in the face of shortages and hiring difficulties. Then, we can help you retain them through employee engagement and compensation plans that are attractive to them. An HRO partner can also monitor and enforce all of the company’s compliance requirements, such as training and licensing.

In short, employers can outsource their HR activities to:

1. Recruiting: Find top talent

  • Provide recruiting and talent acquisition services
  • Application and interview procedures
  • Background screening and drug testing
  • Salary and pre-employment assessments
  • Onboarding toolbox

2. Retention: Keep key experts

  • Provide guidance on employee relations matters
  • Professional workshops
  • Performance management and leadership training
  • Accurately pay employee wages
  • Leverage improved buying power to be able to offer better benefits

3. Other services: Ease your HR workload

  • Train staff on HR related topics
  • Outline a safety and risk program
  • Administer benefits programs
  • File appropriate employment taxes and maintain records

As a result, HRO can bring labor costs down while returning time to business owners. HRO partners can employers deal with and prevent labor-related headaches and expenses. This is particularly valuable for small to midsize businesses, which often lack the capital and personnel to handle HR-related tasks with enterprise-grade tools and techniques and to absorb mounting costs.

What should you look for in an HR provider?

First, it’s key to find HR service partners or co-employers (like CoAdvantage) that are experienced in working in your field and offer a comprehensive set of services. Then, you want a provider who has extensive expertise with staffing and labor issues specifically, since that is one of the major HR challenges facing almost all employers today. third, you need a provider who can help your company ably adjust to rapidly changing market conditions, regardless of whether those changes are seasonal, economic, strategic, or pandemic-related. Most industries are fast-moving, and your HR provider or PEO must be able to help you stay ahead of changes.

How should you prepare for HR outsourcing for professional services?

1. Assess yourself: (your HR partner can help with this). This means looking at different aspects of your business, like turnover, issues in your compliance program, hiring gaps, etc. An assessment doesn’t have to be in-depth to get started, but you do need to understand your strengths and weaknesses to know where you most need help.

2. Identify employment-related issues: Once you’ve completed at least a simple assessment, you should have an idea of where your current practices need to be bolstered. For example, you might be facing unusually high turnover rates that you’d like to bring down. With your HR partner’s help, these issues can help guide what services you select and how your partnership is managed.

3. Identify your business goals: One common mistake is thinking of HR as siloed from the rest of the business, but the best performing HR operations will be carefully and strategically aligned with larger business objectives. Make sure you can communicate your high-level business objectives to your HR partner so they can tailor their services to serve those goals in addition to labor- and compliance-related needs.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.