Astute company leaders know that their employees are the backbone of their business. Supporting them with a strong human resources department helps to maintain employee satisfaction and build a solid workplace.
However, employing a full-service HR department isn't always viable for small businesses. After all, keeping experienced HR professionals on the payroll can be expensive. These businesses often need a systematic approach to help with recruitment, onboarding, payroll administration, employee benefits administration, employee training and development, compliance support, and performance management. In addition, companies look to HR to keep them up to date on technology and employment-related rules and requirements. The trouble is that they often lack the resources to handle all this in-house. These are all good reasons why outsourcing HR is becoming more common than ever.
Different types of outsourced HR solutions exist. A professional employer organization (PEO) and a human resources organization (HRO) are all options. This article dives into how to assess HR outsourcing companies so you can find one that suits your organization's needs.
How to Evaluate HR Outsourcing Companies
To ensure you choose a company that provides the HR functions you need, consider what tasks your current HR staff lacks the time or skills to handle. Use these gaps as your starting list of what you'll need an HR service to provide.
From there, the following steps provide insight to help you toward a sound decision.
Factor in must-have specialty HR services
Some human resources outsourcing companies provide a wide range of services, from administrative tasks to payroll processing, employee benefits administration and talent management. Others are more narrowly focused, perhaps covering a number of essentials, like payroll services and tax administration. When you assess your HR needs, you might notice that certain aspects of your business require special expertise or attention. Maybe talent acquisition is an essential need for your growth in a difficult labor market. When you consider HR outsourcing, look at the full scope of needs and related services and solutions. Your business operations will most likely gain the most from a single HR outsourcing service that can meet all of your organization's objectives.
Review compliance services
Ask the outsourcing companies of interest about their security and privacy practices, including their data security policies. You should also ask if they have expertise in the applicable local, state and federal employment-related rules and requirements that may affect your business. If you operate in a highly regulated industry, consider a company that has expertise in the specific industry.
Examine data management and analytics
Being able to properly translate and use HR data is essential. A reliable small business HR outsourcing provider can provide you with workforce analytics and data-driven insights to help you make informed decisions.
Assess their reputation, reviews and track record
One of the best ways to weigh whether a company may be a good fit for you is to learn what companies like yours are saying about it. Do some research. Have they received any business awards or other accolades? Read online customer reviews, ask for recommendations, and check their success track record. When you see and hear good things repeatedly, move that service provider closer to the top of your list.
Evaluate scalability and flexibility
Include your company's growth plans in your decision-making process. Choose an HR outsourcing company that can meet your business's demands and keep up with steep growth if they need to. They should showcase their ability to adapt to your changing needs as you scale. Otherwise, mark them off your list.
Think about customer support
How attentive, astute and resourceful is the company's customer service? Slow response times and inexperienced customer service agents can make every HR function they handle for you sluggish. Dig into their customer support levels to ensure they meet your standards of excellence.
Weigh the pricing structure
Price, while not always the sole determinant in business decisions, is an important factor. Narrow your list by each company's standout features, impressive reputation, breadth of service, and customer support. Then, compare the pricing of your top HR outsourcing choices.
Keep in mind that a higher upfront cost might make sense if the service provider includes comprehensive services, extra training and robust client support.
Deciding on Outsourced HR Services
In your search to outsource HR with the right provider, you may find several promising candidates. But how can you decide for sure who to engage for the all-around HR support for your business? We recommend using a systematic approach.
An effective method for choosing between multiple top contenders is a scoring system. Objectively comparing each HR outsourcing company offers clarity regarding which ones best align with your organization's priorities. Five elements to include in your scoring sheet are:
- Cultural fit. How do each company's core values and mission align with yours? A strong cultural fit may facilitate better communication, smoother collaboration and higher satisfaction.
- Price vs. service. What breadth of service does each company provide for their pricing? Don't get hung up on a dollar amount alone. Consider the overall value and return on investment (ROI) each option brings to the table.
- Company demo. Demos are illuminating and should carry a lot of weight in your decision. A quality demo can tip the scales, as can the company's ability to show they understand and can address your needs.
- Compatibility with current systems. Your current tech stack integration capabilities with HR outsourcing company's platforms and HR software. If it doesn't, you will inevitably need more resources to complete tasks, which can decrease employee productivity. Companies that mesh well with your current operational processes should be at the top your list.
- Expertise and specialization. An HR outsourced provider with relevant expertise may give you a competitive edge and strengthen your risk management objectives. If your business needs specialized services, the companies offering those should be the ones you consider most seriously.
Record your findings on your scorecard and weigh them based on your company's unique requirements. Tally them up for the data you need to make an objective, informed decision.
Outsourcing HR with TriNet
Whether you're outsourcing limited HR functions like payroll processing and benefits administration or comprehensive HR services outsourcing, there are advantages abound. Consider it a strategic move to strengthen your culture, increase employee satisfaction and free up time to focus on building your business.
If you're looking for an outsourced HR provider, TriNet offers several advantages. From our full-service HR solution that includes 24/7 customer support, payroll processing, benefits administration, expertise and more. Reach out today so we can help you with the increasing pressures of complex HR administration and its ongoing tasks.
This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.
