It's Not That Easy

The complexity of human resources issues, the administrative challenge of managing a workforce and the ongoing quest for talent make many executives & business owners wonder how they can stay ahead of the game, especially in a hyper-competitive marketplace.

Following the (ever-increasing) legal requirements and maintaining compliance with these various rules and regulations can be costly and time-consuming. Maintaining a fully compliant HR department can be expensive. Of course, the cost of NOT complying is even more costly - either in the form of fines, penalties, or legal settlements (which are paid, win or lose).

Clearly, it's not that easy. Too much gets in the way of fulfilling the core mission of an organization. But there is a better way.

HR outsourcing organizations (HROO) have been around for a couple of decades, at least, and growing exponentially in the last few years. Gartner predicts this to be a $52B industry by the end of 2007.

It makes good business sense, by affording companies a greater level of expertise and efficiency, usually at a lower cost, compared to creating an in-house HR department. This strategy also allows managers and company leaders to focus on their core business responsibilities.

In one sense, companies already "outsource" many functions now, if you consider that you probably have different vendor relationships for employee benefits, retirement plans, disability & supplemental insurance, workers’ compensation, safety consulting, training, employment law, accounting and payroll. HROO consultants suggest that you don't make a major change in what you’re already outsourcing. What they do recommend is that your company considers consolidating all these relationships with an HR Outsourcing Organization (HROO) relationship, where you have one professional team of experts and one vendor relationship to manage.

Primarily because of the high level of expertise & economies of scale, companies that use HROO relationships maximize their profitability, increase employee productivity, save time on transactional (non-revenue producing) HR tasks, lower their liabilities as an employer, and ultimately lower their labor costs.

Not sure if it's for your company? Engage a consultant to conduct a comprehensive HR Assessment for you to see if it's a fit. Best case, you'll know you're doing OK with the status quo. Better case is you'll find areas of improvement and find new ways to protect your assets.