Less Burden, More Focus on the Bottom Line — The Case For Outsourcing HR
HR outsourcing can offer your business many advantages. Here's a look at why organizations have decided to outsource.
Why do companies choose to outsource and work with a Human Resources Business Partner for their HR needs? Simply put, HR outsourcing can help alleviate the stress put on the C-suite team and allow them to focus on growing their business.
More often than not, the C-suite at a small business has to make decisions around various components of HR, such as employer regulations, employee relations, employee benefits and payroll, which can end up taking them away from the parts of the business they serve best. With the help of an experienced HR professional, these tasks can be completed more efficiently.
To help understand the many benefits an outsourced HR partner can offer your business, let's take a look at why organizations have decided to work with them.
Why Do Companies Choose to Outsource?
The cost of workers' compensation, the cost of benefits and a desire for access to HR support are some of the main reasons why businesses choose to outsource, according to Lauren Davis, Sr. HR Business Partner at ADP HR Outsourcing.
An HR business partner can handle many traditional HR responsibilities so the C-suite can focus on their core business.
"There's a lot that we take off a client's plate — such as different compliance filings that have to be done around the Affordable Care Act, for example, that take a lot of time and energy — that we make very simple for them," says Davis.
Furthermore, when businesses outsource HR, they have access to a dedicated HR business partner to navigate them through HR processes. According to Davis, "The truth is that an HR business partner with ADP HR Outsourcing really needs to be an expert in just about everything HR. The breadth of knowledge that we are required to have to support our clients is very, very extensive." This knowledge includes an in-depth understanding of compliance, employee relations, performance management and termination support.
"The most important thing for me is to help our clients understand that HR really isn't just a personnel department anymore, that it's really about your people, your biggest asset, and that this is a way to engage, reward and recognize your people."
Brandon Ryan, Sr. HR business partner at ADP HR Outsourcing
The employee relations factor is a significant one, says Davis, who estimates this aspect accounts for half of her interactions with clients.
"When they have an employee with performance issues or challenging employees who need to be terminated, and they need to make sure their documentation is solid, we are there," says Davis. "When there is a harassment claim that needs investigating, we step in. When they have a complex leave of absence situation, we help navigate. These are time-consuming obstacles in a business that smaller businesses often don't know how to manage."
HR business partners are also knowledgeable about benefits, and they can help guide smaller businesses toward benefits they otherwise might not have access to or be able to afford.
"There are a lot of components to what we have to do, and how we manage and service our clients," says Davis.
Another reason why organizations are choosing to invest in outsourcing is that HR business partners have vast experience working across other departments, as well as across industries. Davis, for example, has worked with a couple hundred clients across several industries over her career at ADP. These clients have ranged from manufacturing to medical to entertainment to more niche industries, including candle makers and bus bench manufacturers.
This provides an important benefit for organizations — if they're facing a specific situation for the first time, they can seek guidance from an HR business partner who has faced that situation before and help them handle it properly.
Having an HR professional available to appropriately and efficiently handle tasks associated with payroll, and benefit administration, to name a few areas, is another big draw for small businesses that might not be large enough to have an onsite HR person.
The Big Picture
If you're on the fence about investing in outsourcing, here's another point to consider: Outsourcing in this case means more than just lessening HR tasks; it also means gaining "a partner to help bring your business forward," says Brandon Ryan, Sr. HR business partner at ADP HR Outsourcing.
"The most important thing for me is to help our clients understand that HR really isn't just a personnel department anymore, that it's really about your people, your biggest asset, and that this is a way to engage, to reward, and to recognize your people, and to ultimately keep your business on the profitable side," says Ryan.
Ryan finds that a huge tipping point for small businesses is an inability to provide benefits that compete with those offered by larger businesses in their respective industries. He explains that, through ADP HR Outsourcing, clients have access to a whole suite of offerings, such as life disability, commuter and flex benefits, as well as health savings accounts.
HRBPs have a lot to offer small organizations, especially in terms of lending strategic and bottom-line value. They can help remove the HR burden from upper management and enable organizations to focus on their employees and the best way forward for their business.
Take a look at this inforgraphic for more info: How Outsourcing HR Provides Peace of Mind to SMBs
