Outsourcing Those HR Headaches

Source: Fiducial

The real success of any business lies in the ability of its employees to perform their tasks well and as a team. One of the hardest jobs a small business owner has is in finding and hiring the right employees. Recruiting, interviewing and maintaining a staff of reliable, trustworthy and hardworking employees can be, under the best circumstances, difficult. For a business owner out of their comfort zone, it can bring disaster in the form of legal battles and lost revenue when the situation goes badly.

The human resources outsourcing business is estimated at approximately $37.7 billion in 2003 according to the market research firm Dataquest. Outsourcing HR tasks such as payroll, recruiting, training, employee manuals and handbooks, and compliance can lift a heavy burden from a small business owner's shoulders freeing them to focus on business development and growth.

Is outsourcing right for you? If you have fewer than 100 employees, the answer is probably yes. Outsourcing can provide tremendous benefits for the price and allow you to focus your energies on the business at hand. By streamlining your HR efforts, you'll also be providing a consistency in policy and setting a level of expectations with your employees that reassures them that the business is on track and headed for even greater successes. Remember that the risk of overlooking a legal requirement or an employment regulation gets greater as your staff grows. Outsourcing helps to ensure that you're meeting your obligations in a timely and legal fashion.

There are four basic avenues when deciding what portion of your business should or could be outsourced:

1) Payroll administration. This can include payroll processing, tax planning and preparation including 1099, W-2 filings and payments.

2) Employee benefits. Managing a workforce's health care benefits can be overwhelming. There are many plans from which to choose and the actual benefit varies from plan to plan. Using an outside source to present options include employer/employee contributions, establishing new hires and performing cost analysis can provide a solid solution to those health care headaches.

3) Employee management. If you're having a difficult time recruiting qualified employees or if you just don't have the time to sort through the sometimes hundreds of job applications, an outsourced recruiting service may be the perfect solution. Some HR agencies provide the complete package starting with the creation of a job description, to posting, reviewing, interviewing and even making the offer to a potential candidate.

4) Risk management. Workers' compensation, dispute resolution, safety inspections, employee policies and handbooks.

To figure out if outsourcing is a viable option for your small business, try the following cost analysis. Take the estimated costs of an outsourced program and compare it against the average salary and maintenance of an in-house HR director or staff and see if the total difference will be a savings worth taking. Will there be a considerable time loss or an increase in production that you can also estimate based on using an outside HR administrator? If the answer is a resounding yes, then you may want to give outsourcing a trial period.

Fiducial is an international provider of professional business and financial services to small businesses and individuals. Privately held with global revenues of more than $1.2 billion, the company is the thirteenth largest accounting firm in the world and the twenty-fifth largest in the country. For more information on Fiducial or their services, visit www.fiducial.com or contact them at 866-Fiducial.