How to Choose Between HR Outsourcing Companies, Consultants, or Software Solutions
Many business owners who know they want to outsource some or all of their human resources operations struggle to choose from the abundance of options, from HR outsourcing to human resources consultants to software solutions. The move to outsourcing is a significant investment, and it’s essential to get it right. This article will review the options and the value of HR outsourcing companies for small business or non-profit enterprises, plus some tips to get you started.
HR Outsourcing Options for Small Businesses
Sometimes, your business needs a trusted partner to ensure that your human resources run accurately and efficiently. Small businesses often work with outside consultants to cover the following:
- Processing payroll, including tracking time and attendance, withholding taxes, and managing PTO.
- Ensuring compliance with all human resources regulations and laws.
- Benefits enrollment, including 401(k) administration and COBRA administration.
- Workers’ compensation.
- Recruiting and onboarding new hires.
- Training, professional development, and performance management.
- Enhancing employee engagement.
The options include:
Staffing companies provide staff to fill in the gaps in the labor pool. Small businesses often engage staffing services for short-term needs such as filling a vacancy, covering for a key employee on medical leave, or meeting short-term seasonal needs like summer tourism. Some staffing companies also provide long-term solutions like filling a labor market gap. In these situations, the staffing company makes the hire and pays all benefits. The employee is not an employee of your organization.
Staffing HR outsourcing companies for small business are best for filling short-term vacancies where retention and knowledge management are not issues.
A professional employer organization (PEO) is a long-term co-employer relationship. Your business retains the control of the employee for hiring, scheduling, training, and performance management. But the PEO is the employer of record for tax purposes. They handle all of the paperwork, withholding, and verification requirements. They also administer benefits and provide human resources software solutions. Because they are a partner to your business, they also are an excellent resource for consulting.
PEOs are best for small businesses looking for an affordable partnership that allows them to bring world-class human resources management and benefits to their organization at a fraction of the cost.
Administrative services organizations (ASOs) offer many of the same services as PEOs but do not become the employer of record. Employees receive benefits through the small business.
ASOs are suitable for small businesses that want to ensure that all administrative details run smoothly but do not want to enter a co-employment relationship.
Human Resources Information Systems (HRIS) are Software as a Solution (SaaS) packages that provide the system for managing your business’s HR needs. Employees, managers, and HR staff log into the system, and the system often offers operational efficiencies from optimized workflows. The employees are your employees in every way, and you are responsible for hiring, training, benefits enrollment, and compliance. It would be best if you had a trained professional human resources team at your business.
A Software as a Solution package is best for small businesses that have a highly skilled human resources team in place and are looking to streamline operations and HR workflows.
Human Resources Consultants are high-level experts in human resources. A small business will often bring them in for specialized projects. They can help your internal human resources staff develop skills. They can advise on operations and strategy because they keep their eyes on the regulatory landscape. They also can be of great value during complex and contentious HR issues or when a business needs to develop and implement corrective action plans due to in-house compliance issues.
Human Resources Consultants are best to meet short-term needs that require a high level of expertise. They often charge by the project or hourly.
Contact Us Today
Whatever the nature of your business, TANDIUM Corporation can customize a Human Resources, Payroll, and Benefits program to support your needs. With innovative technology, a knowledgeable staff, and personalized attention, TANDIUM Corporation can help you sort through the different options from SaaS to HR outsourcing companies for small business, and identify the solution that works for you. TANDIUM Corporation serves the Human Resources, Payroll, and Benefits needs of small and medium-sized businesses and non-profit organizations.
Contact us today to schedule a free initial consultation.