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HRO: Top 3 Reasons To Outsource Human Resources

By December 23, 2012February 19th, 2015No Comments

istock_000012002620xsmallHRO, or human resource outsourcing has become a hot topic in a lukewarm economy.  Having strategic hr partners who can handle the difficult tasks of assuring compliance and timely payroll is just the tip of the iceberg. Not only can an outsourced HR partner work with your organization to become compliant, it can be proactively involved in reducing risk of litigation, as well as streamlining and reducing organizational expenses.

There are three excellent reasons many companies elect to outsource human resources:

  1. Reduce Risk.  With new rules of hr, the opportunity to get into legal hot water has escalated.  Compliance, training and communication with company employees is critical to avoiding MCAD or other lawsuits.  New laws, new regulations and ever changing complexities make it almost impossible to stay on top of human resources best practices without being dedicated to hr full time.  For some companies, even with a full HR department, things can slip through the cracks.  Having an outsources HR partner means that your outsource human resource services are staying on top of these changes for you, thereby reducing risk.
  2. Contain costs.  One way an HRO can help is to evaluate the right-sizing of salaries and compensation.  Evaluating the positions within your organization then comparing them to other organizations within the same geography or industry can reveal situations where an employee may be undervalued or overvalued.   Efficiencies and roles may be revised to equalize work load.  In addition, evaluating benefits programs and expenses to assure that the company is not overpaying for group benefits programs is another way that outsource human resources, or HRO’s can optimize the investment in staff.
  3. Prioritize people.  When employees need information regarding how many days they have left or what their sick time policy is, or if they want to understand what company policy is, having an outsourced human resource group means that the questions are promptly addressed and handled.  While no manager likes to believe that he or she is non-responsive, if the manager has a job to do, the employee request for information may come at a difficult time.  Having a way for the employee to access their information through a portal, or request information from the HRO is a great way to keep your company focused on business.

Whether it is facilitating payroll or assuring direct deposit, paying employment tax correctly or isuing a replacement W-2, it seems that any company that has employees has an obligation to service their job related needs.  Having a strategic human resource partner to handle the HR related tasks can free the resources within the business to focus on building the business while having the assurance of knowing that the HR needs of the company are met.  Especially with ongoing changes with new laws and new hr legistation, being compliant is tricky.

If you are considering evaluating an HRO, be sure to understand what the need of your organizaiton is, and also determine how the outsource human resource organization can work with you.

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