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Employee Management Help For Business Owners

HR Outsourcing Firms Ease The Pain

Business owners and executives have many areas of their business to focus on. Opening the door every morning with a to-do list of tasks is challenging enough, having to be concerned with employee administration and compliance can be overwhelming for most. A recent article in The NY Times highlights some of the issues facing corporations larges and small. 


Look at the wide-ranging duties of human resources, it’s no wonder that companies are seeking outside help. “H.R. is supposed to be responsible for finding, developing, retaining and training the best people,” Suzanne Lucas, author of a blog called the Evil HR Lady. “It can also be responsible for benefits, compensation, employee and labor relations, business partners, data collection and legal issues.”

Fortunately, there are companies whose mission is to help small and midsize business owners and executives comply with the myriad of local, state and federal employment regulations.

Human Resource Outsourcing is a broad term that defines the performance of an HR service by a third party provider. It could be simply an ASO - Administrative Service Organization that provides a single service such as payroll processing, COBRA or 401k administration. Some are Information Technology firms who have developed software programs to ease the burden of employee administration and HR compliance. Many HRIS - Human Resource Information Systems, Labor Management, Recruiting and Staffing software platforms can be customized to the requirements of any businesss or association. Some firms offer a hybrid of technology combined with professional HR support services.

Employee leasing or  PEO - Professional Employer Organizations deliver a comprehensive integrated model called co-employment which enable business owners and corporations to transfer most of their personnel administration, benefits and human resource compliance to a qualified HR partner. The entire focus of these companies is making sure your business operates a safe and secure workplace, and complies with all of the latest employment rules and regulations.

“Outsourcing firms can take up various tasks, from payroll to benefits to recruiting, to free up a client to focus on its strengths, said Don Weinstein, senior vice president for product management at ADP, a large H.R. outsourcing firm. The new health care reform legislation, for example, will have a big impact on employers, some of whom may be overwhelmed by its complexities.”

It is important that business owners, executives and HR directors determine what services they require today and in the future, or as I like to say “identify what’s broken”. There are many providers to choose from, offering different HR service models and pricing formulas. Trying to identify the right fit for your organization can be a daunting task, but once you do, you will never go back to managing your employees on your own.


HRO and PEO Companies - Is Bigger Really Better

Does Size Matter When Considering a Professional Employer Organization?

A large NY insurance group invited me to give a seminar to their agents and brokers on HR outsourcing and the different models, administrative service organizations, employee leasing, and professional employer organizations. During the presentation I explained the  different options, covered the various services, levels of expertise, and the technology platforms that a business owner could expect to receive from each.

We compared the range of charges and identified the areas where their clients could realize significant savings, as well as the additional benefits their employees would receive. Having covered all of the pros and cons of HR outsourcing and professional employers organizations, I opened the discussion for questions and answers.

The questions came fast and furious. How many companies are there? Who are some of the companies? How many co-employees? How much payroll? Are HRO’s and PEO’s rated by AM Best or S&P? All great questions, in truth, most of the questions dealt with how much they would be paid, how soon, the sales cycle and a few questions I won’t repeat. Some of the questions dealt with healthcare reform. You could sense that some in the group were concerned about their future.

Looking Under The Bun …. Where’s the Beef?

Many of the agents where impressed with some of the industry names and statistics. Most were unaware that payroll giant ADP has a seperate PEO division called Totalsource,  as well as their nearest competitor Paychex. They marveled when told of the amazing growth rate of California  based TriNet, who had recently acquired Gevity HR, the nation’s largest professional employer and HR outsourcing organization.

One of the brokers in the back of the room wanted to know if any of the PEOs were public companies. I informed him that Administaff, symbol (ASF), based in Texas was the largest pure-play professional employer organization trading today. When I mentioned that the company reported revenue last year of $1.6 billion dollars, the group really stood up and took notice.

Sitting on the plane returning to West Palm Beach, I was thinking about the presentation. I couldn’t get over how everyone in the room was impressed by the numbers. The amount of revenue generated,  the increase in sales by client and co-employees, and the total number of dollars spent every year on HR administration. Many in the room didn’t take notice until I mentioned household names like ADP and Paychex, who after all, are known for something else …. payroll. In fact, we find that in many areas of the country, their PEO divisions are a big secret to most small and midsize business owners.

I  began to focus on the fact that the people in the room, professional sales people, had placed such a high value on hearing big names and big numbers. It occurred to me, that if it was important to them, then it must be important to their clients as well. But, is this always the case, and should  a PEO ‘s size play a role in your decision making process? Follow along as we look into three areas of a professional employer’s value proposition. The Process - how they deliver their services. The People - the human side of HR, and Price - What are you paying and what are you really getting?