HR is a crucial aspect of your business that does much of its work behind the scenes. It handles hiring new employees, training them, conducting disciplinary actions, running payroll, maintaining employee records, and so much more. It is a complicated but necessary part of your business.
When you need a new HR employee, it may be in the budget to hire a specialist. But you still need the critical work to get done. What do you do now?
Luckily, you have options. Many businesses in your situation look for outside help with HR needs. Either from a consulting firm or an HR outsourcing company, small and mid-sized businesses can get the HR help they need without hiring a new internal HR expert.
What are HR Consulting Services?
HR consulting services offer an attractive option for businesses that may need HR support. Consulting companies’ team of HR experts review your needs and provide you with guidance and advice about what steps to take.
Their expertise and guidance are incredibly beneficial, but it’s still up to you to implement any changes. HR consultants provide you with strategies for fixing issues your company may have. They give you templates to help you create new policies and procedures and offer you best practices based on their experience working with other companies.
But you and your team still have to write new policies and follow the guidance provided by the HR consultant. They simply offer advice but take no action. If your issues aren’t simply organizational, resulting from company growing pains, consultants’ help will have limited use for you since your solutions will require an extensive expansion of your HR systems.
What are HR Outsourcing Services?
HR outsourcing companies have the same expertise and background as consulting companies. HR outsourcing providers will review your current HR needs and make recommendations about what changes to make.
The key difference between HR outsourcing and HR consulting is that an HR outsourcing company becomes your partner and helps you do the work or takes it on for you. They are the experts, and they don't expect you to build a new handbook or know every detail about how to avoid an employee lawsuit.
With an HR outsourcing partner, the work they take off your shoulders saves you money. They handle complex HR matters, but they will also handle routine matters like payroll and benefits administration. PEOs help you maximize your ROI by providing better benefits and a better environment for your employees. That empowers your internal HR systems to engage your employees, making them feel more valued and more productive overall.
Unlike other HR outsourcing options, a PEO ensures you comply with regulatory mandates, saving you money by preventing fines and lawsuits for noncompliance. Through co-employment, your PEO handles your company's payroll and benefits administration as the employer of record. That takes the complexity of these duties off your internal team, freeing them up to work on your core business needs.
An Administrative Services Organization (ASO) can offer to run your company's payroll, just like a PEO. It can seem attractive at first glance, but upon further inspection, you are still responsible for the accuracy of the work the ASO does on your behalf. The whole point of outsourcing HR work like this is to have experts handle the work for you, and you only get that with a PEO.
PEOs provide protection from payroll errors and improperly paid taxes. Your PEO consists of HR experts who specialize in these different areas and provide you with top-notch services. PEOs specialize in HR and remove the administrative burden from you.
Which is Better for Me?
Your exact business circumstances determine which option is a better fit for your organization. If you have a large in-house HR team already, an HR consultant can help with revising your handbook or reviewing your policies for legal compliance.
However, if you need more comprehensive assistance that can partner with and complement your existing HR team, a PEO will likely suit you better. Outsourcing your HR needs gives you access to experts, just like a consulting company would. But outsourcing HR to a PEO goes one step further by giving you a partner to help you do the work needed. A PEO won't simply tell you what you need to do and then send you a bill. Your trusted PEO will be the HR partner you seek to help you continue to grow your business.
Your Decision Doesn't Have to be Hard
When your company faces HR challenges, it's comforting to know that you have options. Determining which choice is right for you requires some upfront investment on your part to figure out just what you need.
Only you can determine the exact needs of your business. Needing additional HR support is a common need for small and mid-sized companies, especially as they face growing pains. Determining which option is best for your company requires research on your part and figuring out your must-haves with an HR partner.
If you only need some general information or guidance about what to do in a specific situation and have an internal HR team, consulting could be the right choice for you. They can write policies from templates you receive and implement the recommended organizational changes.
When your business needs require a more comprehensive option, HR outsourcing might be the best option. HR outsourcing with a PEO gives you access to HR experts who can help with everything you need, from payroll and benefits administration to employee discipline and termination best practices. Many small businesses find the most comprehensive option best for them because it provides all the support they need to reach their growth potential.
