HR OUTSOURCING OPTIONS GIVE YOUR COMPANY A TEAM OF EXPERTS ON COMPLEX LABOR LAWS, REDUCING RISK AND INCREASING COST SAVINGS

Conducting business in multiple states or in states like California, employers are challenged by complex employment regulations, rising lawsuits, and costly worker's compensation insurance unique to businesses in California. From 2000 through 2004, slightly more than 405,900 charges were filed with the Equal Employment Opportunity Commission, and in 2007 the California legislator added 23 more labor laws.

Outsourcing human resources services may be an effective way to strengthen your company’s human resources (HR) professionals’ expertise, helping your business stay in compliance with California’s complex labor laws. Outsourcing also enables companies to shift responsibility for non-core competency tasks that can be handled easily and inexpensively by experts in the HR profession. Three outsourcing options for employers are: HR Consulting services, a Professional Employer Organization (PEO) and companies who specialize in Payrolling as the Employer of Record.

For small to midsize companies, hiring an HR consultant can give you the flexibility to purchase services a la carte. The HR Consultant can assist you with recruitment and selection, HR policies and procedures, training and development, compensation and benefits and employee relations, and can be used on an “as needed” basis. You can create a schedule for them to work on-site at your company or purchase services as a one-time fee or for ongoing service. This flexible schedule enables the employer to make sure their current practices are in accordance with labor laws, but the employer still assumes all risk and liability.

A Professional Employer Organization will legally hire a company's current employees for taxation and insurance purposes. The PEO leases the employees to the client under a co-employment arrangement. The PEO assumes responsibility for all payroll obligations and tax filings, worker's compensation insurance and health benefits, as well as all the associated administrative paperwork. PEOs can employ an entire workforce, but typically your company must have at least 5 employees.

A third HR outsourcing option is Payrolling. Companies that do Payrolling as the Employer of Record allow your company to select which employees they outsource. They can payroll your entire workforce without a minimum number of employees or they can payroll a select group of employees like contractors, seasonal workers and out of state employees. As employer of record, they assume the risk and liability associated with those employees and are responsible for staying current on all employment practices and labor laws. In essence, they come with a built-in HR team for your company and administer payroll, benefits, and paperwork for your employees. Unlike payroll processing companies or PEO's they also fund the payroll.

Gary Schultz, President and Owner of Work 22, uses outsourced payrolling through an employer of record for his recruits. “It’s a core competency calculation” he said. “Do I want to learn how to do HR functions, or do I want to grow my business?” For many companies like Work 22, the bottom-line benefits of outsourcing Human Resources functions are undeniable. For some, it is a matter of convenience and conserving employee resources, while for others it provides reduced risk and peace-of-mind with regard to legal compliance. Ultimately, many are realizing that through the time and cost savings of outsourcing, resources otherwise spent on HR functions can now be redirected toward key business objectives.