Most businesses get to a point when they realize they can no longer manage all of their HR functions
on their own — simply put, they need a little help. Instead of taking on additional overhead and hiring someone who may not work out, many of these companies choose to
outsource human resources functions to an outside company that specializes in HR.
Today, most businesses outsource at least one of their human resources functions. There is no limit to the types of HR functions that can be outsourced: payroll,
benefits, HR compliance,
workplace safety, recruitment,
performance management, and more.
Outsourcing HR functions like these allows businesses to streamline their organizations, minimize HR noncompliance risk, increase employee productivity, and reduce labor and administrative costs. These aren’t the only benefits of businesses that outsource HR enjoy, however.
Learn more about the benefits of outsourcing human resources.
There are a wide variety of reasons a business might choose to outsource its human resources functions. Below are a few of the benefits of outsourcing HR:
The potential for cost savings is often the most compelling benefit of outsourcing HR. Immediate savings often stem from reducing human resources headcount,
consolidating systems and software, and the ability of the HR outsourcing provider to procure health insurance, workers’ compensation and other benefits and
coverages at much lower rates than small and medium-businesses could secure on their own.
Realizing greater operating efficiencies
Outsourcing human resources functions gives businesses access to a team of HR experts, proven processes and sophisticated systems, all of which help streamline
human resources management and help companies manage their workforces more efficiently.
Business owners are expected to comply with dozens (and sometimes hundreds) of complex federal, state and local laws, and failing to maintain compliance with
just one of these can expose the business to thousands of dollars in penalties and litigation costs. By helping employers develop and implement sound human resources
policies and practices, HR outsourcing companies provide the added layer of security and protection businesses need.
Focusing on the core
Human resources is an essential component of every business, but HR isn’t typically a company’s core business. Instead, companies are involved in manufacturing goods,
marketing products or delivering services. Human resource outsourcing companies alleviate the burdens and complexities that surround workers and their issues, like payroll,
employee benefits and workplace safety, allowing business owners to focus their time, talent and energy on their core business.
Learn how to decide whether HR outsourcing is right for your business.
Even if they believe outsourcing HR will almost surely result in cost savings, business owners and executives are often hesitant to make what they see as a dramatic
change to how their company operates.
Making a list of all the pros and cons of outsourcing HR functions can be a helpful exercise for businesses considering outsourcing HR for the first time. This list
should include advantages of outsourcing HR (access to affordable employee benefits, lower overhead costs, increased employee productivity, etc.), as well as any potential
disadvantages of outsourcing HR (the cost of outsourcing HR, less involvement in day-to-day administrative functions of the business, etc.).
Below is a list of questions to consider while making a list of the pros and cons of outsourcing HR:
1.   Is there a real, tangible benefit to performing this function in-house?
2. Could an outside vendor manage this function more effectively or efficiently than your internal staff?
3. Are your employees struggling to keep pace with all of the current and expected demands of this function?
4. Is your organization expending valuable resources on HR that could be better spent elsewhere?
Once you’ve made the decision to outsource HR, the next step is to choose what kind of outsourcing partner you’ll need.
Learn more about the types of HR outsourcing companies
There are four basic types of companies that provide outsourced human resource management:
HR Consulting Firms
An HR consulting firm works best for businesses that need limited assistance or assistance with a specific project. HR consulting companies are most often utilized to
help businesses identify problem areas or weaknesses they may have in regards to human resources, and propose a plan the business can use to address the identified problems.
Once the project or issue is resolved, the partnership ends.
HR Technology Vendors
Some companies have the infrastructure and resources to manage their HR functions internally, but just lack the tools or technology to do so efficiently. In these cases, a
third-party vendor that can provide access to an online HR technology platform the business’ internal HR team can use to manage one or more of their HR functions (most often payroll) electronically.
HR Outsourcing (HRO) / Administrative Services Organizations (ASO)
Companies who decide they need more expertise or ongoing service may choose to outsource all or some of their HR functions to a human resources outsourcing (HRO) firm or
administrative services organization (ASO). Under these arrangements, the outside provider actually takes over one or more of tasks associated with human resources, including
but not limited to: payroll processing, benefits administration, regulatory compliance, etc.
Professional Employer Organizations (PEO)
Companies looking for a turnkey HR department often choose to partner with a PEO. In a professional employer organization (PEO) arrangement, businesses enter into a co-employment
relationship with an HR outsourcing company, which allows the PEO to perform employment-related tasks for the employees on the company’s behalf, and allows the business to enjoy all
the benefits of a turnkey HR department.
Not all HR outsourcing companies are created equal. See what makes a top HR outsourcing company.
G&A Partners delivers outsourced HR support better than anyone else.
We take care of all the tedious human resources functions business owners don’t have time, resources or desire to manage internally – like HR, benefits and payroll. As one of the
top HR outsourcing companies in the country, G&A Partners specializes in helping companies grow their businesses faster, take better care of their employees and realize their business goals.
Unlike other human resources outsourcing companies, however, G&A doesn’t take a one-size-fits-all approach to human resources – instead, we take the time to understand our clients’
unique business challenges and concerns and create custom HR, benefits and payroll solutions that work for their company and employees. G&A’s flexible, scalable HR solutions can work
for a wide variety of companies, across all industries. Whether you’re looking for small business HR outsourcing services, or a large company looking to outsource human resources, G&A
partners can deliver the people, processes and technology your business needs.
Ready to experience the benefits of partnering with a top HR outsourcing company for yourself?
Schedule your free business consultation with one of G&A Partners’ business advisors today!