HR Outsourcing: How to Choose the Right Firm

 In Blog

Outsourcing is a great option for business owners who want to save time and run their company more efficiently. When you make the decision to outsource payroll, you are also turning over your payroll tax responsibilities and confidential company information. Mitigate risk by obtaining references and getting to know your outsourced personnel. When hiring a Human Resource Outsourcing (HRO) firm, verify that they are a reputable company and are a true business partner who fits your corporate culture.

The outsourced company you choose should be licensed, insured and bonded.

If you are considering outsourcing, ask yourself these simple questions:

What are my responsibilities and risks as an employer?
What are my risks and responsibilities if I outsource?

Consider these three major areas of risk:

1. IRS/Tax Compliance.

Mishandling tax issues include penalties and additional taxes.

When you outsource, the HRO collects and remits payment on your behalf for payroll taxes, including Federal and State unemployment taxes, and workers’ compensation payments. Often times the HRO is assuming the liability through co-employment- make sure you understand the structure and transfer of any liability.

2. Employment Law.

Federal, State and local employment laws can be a complicated set of rules and requirements. If you are not educated in employee rights, minimum wage amounts and processing of hiring, disciplining and firing employees, you can end up with fines and penalties and lawsuits that can put any company directly out of business.

When you decide to outsource, you are obtaining access to knowledge regarding laws and regulations to minimize your risk of legal liabilities, which can be a huge benefit to your organization. Make sure the HRO you chose offers employment-related solutions that meet your needs, including offering a robust benefits package.

3. Company Culture and Employee Retention.

Employees are your most valuable asset. Offering training and development to employees can help effectively attract and retain personnel. Not only will employees feel more valued with career development initiatives, employers can reap the benefits of lower employee turnover.

HRO firms can keep your business in compliance and your employees engaged in your companies overall vision. To accomplish engagement, tools such as job descriptions, performance review protocol, and online training and development can enrich employees’ career paths. Be sure to talk with the HRO firm about what they can offer in terms of training and risk management.

HRO organizations offer incredible value to businesses. By transferring liability in terms of taxes, unemployment, and workers’ compensation, companies are able to focus on revenue producing activities. HRO firms can also provide training and development to your employees and offer “big company benefits” for smaller organizations. Make sure the HRO firm understands your corporate culture and philosophy to ensure the right long-term solution for your organization and your employees.


About the Author:

Janet Pells joined the Human Resource Outsourcing Industry in 1995 after serving in a management capacity in the medical industry for 23 years. Ms. Pells has been acknowledged as a top producer within the outsourcing industry and was responsible for acquiring some of the largest clients at Employee Services, Inc. After the acquisition of Employee Services, Janet joined Anthros, Inc. as a sales leader managing 13 sales professionals nationwide. Since then, Ms. Pells has been responsible for generating revenues in access of $200 million with a keen focus on healthcare & hospitality industries.

About Anthros, Inc.:

Anthros provides expert back-office solutions in human capital management-from payroll and human resources, risk management and workers’ compensation to business consultation and beyond. Anthros focuses on “Human Capital” so businesses can focus on profits.

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