Highlights
- Running a business requires striking a balance between administrative tasks and strategic work.
- Human Resource Outsourcing (HRO) can help companies focus on high-impact activities by taking over functions like payroll or compliance.
- Synuity provides flexible HR solutions for SMBs seeking to outsource back-office operations. Contact us to get started!
Admin work takes time and requires great attention to detail, making it hard for companies to prioritize more strategic, revenue-generating initiatives. Outsourced HR solutions can unburden businesses from time-consuming tasks, enabling them to reach their full potential.
By outsourcing some of your HR functions, you can gain access to advanced technology, enhanced processes, and a team of specialists to support you in complex areas like compliance, payroll, or benefits administration.
Read on to find out more about HRO and its numerous advantages for small and medium-sized businesses.
Let’s jump right in!
Outsourced HR or HRO Definition
Human Resource Outsourcing (HRO) is a business strategy where a company delegates some of its Human Resources functions to an external service provider. Outsourcing HR can make processes more efficient, reduce costs, and free up internal teams to focus on core business activities.
Depending on their specific needs and goals, businesses can choose to outsource specific HR functions — such as payroll processing, recruiting, or benefits administration — or the entire HR department.
Flexibility makes HRO very desirable for small and medium-sized businesses, allowing them to scale as they grow.
Another form of outsourcing is through Professional Employer Organizations (PEOs), which assume legal responsibilities and risks of a company under a co-employment agreement.
While PEOs typically offer a fixed package of services, a few of them allow businesses to pick the specific services they’d like to outsource. That’s exactly the case at Sinuity!
Outsourced HR Services
Now that you know what HRO is, you may be wondering: Which HR functions can companies outsource? Here are some of them:
- Payroll processing: This involves managing employee salaries, deductions, and tax-related matters.
- Benefits administration: Negotiating and handling employee benefits such as health insurance, retirement plans, and other employee perks.
- Recruitment: Companies can outsource their recruitment process, including job posting, candidate screening, and initial interviews.
- Employee training and development: Providing training programs and continuous learning opportunities for employees.
- HR administration: This involves HR services such as record-keeping, compliance, and employee documentation.
- Employee relations: Handling employee grievances and conflicts, and ensuring adherence to company policies.
Human Resource Outsourcing Benefits
So, what are the potential benefits that outsourced HR services can bring to your company?
Let’s explore some of the key advantages:
1. Cost Savings
If you have a small or mid-sized business, outsourcing HR functions can lead to significant cost savings. By partnering with highly skilled specialists, you avoid the costs of hiring and training a full internal team while ensuring your payroll, compliance, and other processes are handled efficiently.
At the same time, you gain access to technology resources, not to mention the advantage of getting more competitive prices and wider coverage options for healthcare and other employee benefits.
2. Focus on Core Business
Running a business involves countless administrative tasks, from calculating taxes and deducting benefits to tracking time and attendance.
“64% of companies say they spend over 570 hours a year and at least 11 hours per week on HR administration.”
— Paychex Inc.
By outsourcing tedious, time-consuming HR tasks, your business can redirect those internal resources and attention toward core business activities. This enables better strategic planning, which ultimately leads to higher employee satisfaction, productivity, and retention.
3. Improved Compliance
Staying compliant with federal, state, and local employment laws can be overwhelming. Regulations regarding paid leave, healthcare benefits, and workers’ classification are constantly evolving, and you need to stay on top of every update to ensure your business is always aligned with them.
For instance, according to the federal Fair Labor Standards Act (FLSA):
Employers failing to pay minimum wage can result in civil penalties of $1,000 per violation.
HR outsourcing gives you peace of mind that your business remains in compliance at all times, reducing the risk of legal issues and penalties — which can not only cost your company money but also damage your reputation.
4. Scalability and Flexibility
Flexible outsourcing solutions can help you scale HR services up or down based on your business’s current needs. Businesses often go through periods of growth or downsizing. Having an adaptable solution that can accommodate your specific requirements can be very helpful.
5. Advanced Technology
HR outsourcing providers often invest in state-of-the-art HR technologies.
By outsourcing functions like payroll or time and attendance tracking, you can gain access to advanced systems without having to make substantial upfront investments.
Meet Synuity: Flexible HR Outsourcing Solutions
Outsourced HR services are the key to a more efficient and productive business.
By working with industry experts, you can reduce the risk of non-compliance and increase transparency and accuracy throughout complex HR processes such as payroll processing. Also, you can gain access to cutting-edge technology and be able to offer more competitive healthcare benefits to your employees.
At Synuity, we provide PEO services & flexible HRO solutions to simplify the administrative side of your business and give you back the time you need to focus on growth initiatives. No matter the size of your business or your sector, we can find an innovative solution that fits your unique needs!
Contact us to learn how we can help your business thrive!
