4 Critical Reasons to Consider Outsourced Human Resources

outsourced HR signHuman resources tasks like payroll, benefits administration, tax filing, and legal compliance can eat up huge chunks of time. As your business grows, the time needed to fulfill these responsibilities grows as well. At a time when creative strategy development is critical to the success of the company, HR responsibilities crowd it out. Outsourced HR offers a strategic solution to this universal problem, putting the oversight of business growth back at the top of your list.

Benefits of Outsourced Human Resources

By entrusting your HR operations to a competent PEO, your company benefits in several specific ways:

  1. Time Savings—Outsourced human resources provides relief for time-strapped business owners by removing the minutiae of payroll, taxes, and other HR responsibilities from your to-do list. Outsourcing these tasks frees your calendar for other pressing business matters.
  2. Cost savings—A PEO can negotiate better rates on workers’ compensation, reduce the cost of maintaining an HR department, and evaluate insurance claims for validity. By working more efficiently, a PEO can save you big bucks on most of your HR responsibilities while also eliminating costly mistakes that occur when employers become stretched too thin.
  3. Reduced Legal Liabilities—Employment regulations, labor laws, and other legal questions can create problems when businesses fail to remain up-to-date on the current requirements. Because these laws are subject to frequent changes, it’s easy to miss a compliancy issue that you could be held legally responsible for. One of the responsibilities of the PEO is to remain current on the laws that affect business operation and to make sure your company complies with each regulation. Outsourced HR can significantly reduce your risk of facing a lawsuit.
  4. Greater Efficiency—No one likes to spend time filling out tax forms, filing claims, and running background checks on potential employees. A PEO will handle these tasks for you, increase accuracy, and provide the benefit of the latest technology available to keep your business competitive.

Considering Your Options

A PEO offers full-service human resources solutions. This option will handle everything from payroll to taxes to unemployment claims. Not everyone wants to outsource the entire HR department, however. If you’re looking to retain some control but need help with daily administrative responsibilities, an administrative only services (ASO) package may be the right choice for your company. With this option, you can choose which services are right for your business while remaining the employer of record.

Outsourced human resources appeals to many companies who have found that maintaining an HR department in-house is too big a drain on time and resources. According to The Society for Human Resource Management, the trend toward outsourcing HR responsibilities is growing rapidly. The top three reasons business made the choice were to save money, focus on strategy, and improve compliance. Outsourced services most commonly include 401(k) administration, employee counseling, retirement planning, pension administration, temporary staffing, and background checks. Your PEO will handle all these tasks and more, lifting the burden of taxes, payroll, and administrative duties off your shoulders so you can turn your energies to the success of your business.