Are human resource services right for you?

Working with a human resource services provider is not a decision to you can make lightly since it requires internal commitment to investing in HR and extensive coordination to make it work successfully. Here are some considerations of why your company may or may not want to consider human resource services.

Provides expertise Working with a human resource services professional provides instant expertise. This can be a real benefit for the many small companies that hand off HR responsibilities to an untrained staff member. While such an action can save money, it ultimately can leave a business ill prepared if a major problem comes up like a sexual harassment suit or a bad firing. An HRO provider can provide the expert guidance necessary to avoid these land mines.

Companies can also turn to human resource services for their technical expertise. HRO providers can help make forms and applications available online, allowing employees to fill them out and file them electronically instead of having paper float around. They can also implement performance management systems to evaluate employees and determine future pay. These systems can be costly, however, and make sense for only larger companies.

Reduces administrative burden Your in-house HR staff can spend a great deal of time performing administrative tasks and developing internal policies. They may not have the resources to look into more comprehensive benefits or training programs for employees.

HR outsourcing takes over these administrative responsibilities, allowing your employees to concentrate on developing and launching new programs and benefits. Keep in mind that these responsibilities don't go away altogether, you'll still need someone to provide oversight. In addition, you should expect to budget extra dollars to implement such programs and additional benefits. However, this can be a tremendous way to motivate employees and demonstrate commitment to your staff's career development.

Saves money A full-time human resource services director could cost your company $60,000-$100,000 per year and more. An HRO provider can cost considerably less -- as little as $20 monthly per employee, depending on the number of services you need.

The tradeoff is the lack of in-person attention. Most HRO providers do their work away from your office and only make sporadic visits to your worksite. Such a setup can be particularly challenging with recruiting where it can be difficult to effectively screen, hire, fire, and retain employees when a HRO provider is not on site every day. If the partnership is not defined correctly, these responsibilities can quickly end up back in the hands of in-house HR personnel and potentially even the hiring managers.

Manages organizational changes A company is a living, breathing organism - prevent it from evolving and you risk stunting its growth.

Human resource services providers look at your business to understand how change will affect other employees. Their goal is to minimize disruptions while implementing changes that can help your business contain costs, maximize resources, and respond more quickly to customer demands.

An outsider's perspective can be helpful in that it draws upon the cumulative experience an HRO provider has had in helping to manage such change. Transitions can't be foisted from the outside, however. They will require significant in-person interactions driven by internal employees who can gauge their reception by employees and react accordingly to ensure success.

Regardless of what services the HRO provider delivers, it will be important to manage this organizational change. Outsourcing HR duties can raise employee fears, with questions raised about why the company needs to hire outside help.