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Is Outsourced Human Resources A Viable ADP Resource

By November 30, 2012 February 19th, 2015 No Comments

istock_000016187178xsmallJuggling the skills of a small human resource department can be tricky and more expensive than you think.  Especially if your human resource team is tasked with many roles.  Not only should the HR deparment be creating and implementing policy, they also are responsible for hiring, training, motivating and retaining associates.  Add to the list employee benefits administration, legal compliance and payroll and you have a group who has to keep many balls in the air.

ADP is an expensive and robust solution.  Many organizations who elect to utilize ADP fail to efficiently and effectively get the full value of the features from the software.

If you use ADP and are not sure whether you are utilizing the full capability for the system, you are not alone.  Many small and mid-sized business organizations may not have the capabilities in-house to re-engineer HR business processes or ADP implementation. A company that has about 500 employees with a 3 person HR department may find it difficult to implement an ADP solution, or if using ADP, utilize the full range of capabilities for their company.

There is a limited amount of expertise within the small human resources department, so if the HR team is focused on recruiting, employee benefits, and policy creation and implementation, there may not be a great amount of bandwidth for training, development and maintaining personnel.

With outsourced business processes, aso or bpo’s, employers can actually enable the HR practitioners to implement ADP technology in a more efficient manner.  Hiring an outsourced expert who is experienced and knowledgeable regarding implementing ADP can fast forward and streamline the process, as well as result in greater utilization of the various aspects of ADP software.  With a peo, the business is not the employer of the employees, and many of the related expenses are bundled into the PEO service agreement.  The hidden expenses that are involved in a PEO has led many organizations to seek PEO alternatives, such as BPOs, ASO’s and outsourced human resources companies.

Larger organizations, with 1,000 to 2,000 employees may have the ability to have a larger HR department. Rule of thumb is 1 HR practitioner per 100 employees.   Staffing ratios for a company this size may imply that there are potentially 4 HR practitioners who do payroll, 3-4 recruiters, possibly 2 who handle benefits, and another 3 who are generalists, or directors.  For each of the human resource disciplines, the team is still very sparse, and the depth of knowledge is limited.  Utilizing an outsourced human resources organization can fill in the gaps and limit liability and exposure.

Even with an outsourced human resources partner, there are still concerns with software and payroll to assure that the system is producing accurate information and that the features that are involved in a robust ADP solution are being utilized.  Without having inhouse expertise in ADP, it may be wise to involve an ADP implementation specialist to complement and extend the ability to maximize the payroll processing investment.

Change management and business process development can slip in priorities when the human resources department is lean and the capabilities are taxed.  HRO or human resource outsourcing may be the solution for implementation of change initiatives through the organization.

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