Humanpoweredbiz

A blog about Human Resources (HR) Services and Outsourcing.

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How to choose an outsourced HR supplier

More and more businesses of all sizes are going with HR outsourcing. It's a way to save money on important functions and make the organization more efficient all around. When you are making this decision for your business, it's important to choose human resource companies that fit your needs.

There are a lot of important factors to consider. Can the HR firm flex to meet your business needs? What type of HR systems does it use? How much will the outsourcing cost? Can it help with business planning? What are the terms of the contract? How good is the HR outsourcing firm's data security? Will they provide dedicated people working on your account? Will the HR services be customized to your needs? Will the supplier fit with your culture?

A recent article on sourcingfocus.com does a good job of tackling some of these questions and providing reasonable answers:

HR is rarely a priority for a business start-up. As an entrepreneur, the focus is getting your great idea off the ground and then building the company. While you may be a manageable two-man band today, your HR requirements will be small and occasional, but as you grow and recruit more people there will come a point when you need to bring in some more regular HR expertise to manage this growth effectively.

Partnering with the right HR outsourcing provider can bring enormous benefits to organisations. It enables them to keep control of the budget while enabling them to drive the business forward. The key to choosing an outsourcing partner is to find one who can fit with the business culture and work closely with you, as an extension of the team, at all stages of your business growth.

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Sacramento Bee article on HR budgets mentions popularity of HR outsourcing

This interesting article from the Sacramento Bee is all about how more companies are devoting more of their budget to their HR departments and programs, but most are still looking to save money wherever possible:

Following two straight years in which HR department staff cuts were more common than increases, the pattern reversed in 2012; reported staffing gains in human resources outpaced reductions-in-force by 10 percentage points this year. Budgeted adjustments in HR funding for 2012 also reflect some improvement from the last few years, but are still well short of levels observed before the Great Recession.

One key point that is made is that a good way for businesses of all sizes to make their HR operations more efficient and cost effective is to outsource some or all of HR functions. The article says that a high percentage of businesses are doing exactly that:

Outsourcing is a well-established aspect of doing business in HR. Roughly seven in 10 human resource offices (69 percent) outsourced at least one activity or program in 2012, little changed from reports for the past several years. Employee assistance plans and retirement planning programs remain common targets for outsourcing.

Quality and track record are primary determinants of vendor selection for outsourcing. Existing relationships or the low bid do not often secure the inside track for contractors and vendors, according to surveyed HR executives. 

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Why new companies and startups should outsource their HR

Anyone who has tried to start a new business can tell you that working on HR activities requires a lot of time. Payroll, policies, procedures, benefits, compensation, and managing personnel issues. Managing these things threatens to take control of your entire daily schedule. Plus, the costs of HR constitute much more than just employee wages. HR functions don't drive revenue but they do cost you money. Outsourcing your HR functions costs money as well. However, when you calculate the total cost per employee, and include the incalculable saving of remaining in compliance with the law and regulations, it seems pretty obvious that HR is an important and vital business cost.

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TheStreet.com on outsourcing Human Resources

This great article on thestreet.com talks about the value that many businesses are finding in outsourcing their Human Resources work.

Human resources departments are a must-have for large corporations, but having a dedicated HR pro is a luxury for most small businesses. When there are only a handful of employees, you hardly need someone tending to their needs full time. But as small businesses grow, their needs change. A dozen new employees may need to be hired on short notice, which means crafting job descriptions, determining salaries and designing training procedures. Wouldn't it be great if you could bring in an HR expert to handle it all?

You can. Many human resources functions lend themselves to outsourcing, allowing small businesses to pay for just the services they need rather than keeping a full-time human-resources specialist on staff. Payrolls, for example, are often handed off to outside firms; industry leader ADP (ADP) processes payments for one in six workers in the United States. Employee benefits can also be handled by an outside vendor, saving business owners the hassle of sorting through mind-numbing health care plans.

At HumanPoweredBiz, we believe this trend is going to continue and more and more businesses will outsource their HR functions.

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Harvard Business Review: Why HR Really Does Add Value

The Harvard Business Review blog has a great post entitled Why HR Really Does Add Value.

Here is one of the best quotes from the article:

From my experience, however, I've learned that this is not a simple shift that happens overnight--it takes some time. To get there, our HR department is applying the same principles of business process redesign, organizational redesign, job redesign and competency model development to our own function. We have mapped competencies to each job and started to understand the gaps between where we are today and where we want to be in the future. We have also started to lay out a long-term development process for our HR associates to teach them everything from financial basics to strategic workforce planning. We're also using technology to relieve our staff from doing more routine HR work so they can focus on building capabilities.

Many companies are finding that outsourcing HR enables them to make these improvements event faster.

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Society for Human Resource Management Services survey on holiday observance

According to a survey from the Society for Human Resource Management Services, Thanksgiving and Christmas are the most observed holidays in the workplace.

99% of employers who responded to the survey said that their offices would be closed on those days. 

In the retail, food services, health and emergency services industries, some people may be surprised by this "closed for business" status. The stats show that most survey responses came from office professional, tech, manufacturing, financial, and educational organizations and not from ones that operate 24 hours or do a lot of business on the holidays.

Unsurprisingly, the 2nd most common holiday closing is for New Years Day, then Memorial Day, then Independance Day, followed by Labor Day.

Only about 33% of the respondents said their companies would be closed on Presidents Day and Martin Luther King Jr. Day.

The Society for Human Resource Management Services said that just over 50% of companies have some kind of paid time off plan to give employees some amount of discretion over which days off they choose to take. Less than half say that they provide stand-alone paid vacation plans to employees.

Some organizations offer paid floating holidays, which is seen as an altervative way to provide associates with some flexibility in their off time planning.

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Top tips for successful outsourcing of HR services and safety management training

It has become increasingly popular for businesses and organizations to outsource part or all of their training functions, including training for safety managers such as safety management training. If you are considering HR outsourcing, here are some top tips:

1. Think about important functions: Does it make good financial sense for your organization to do activities that are not part of its core business? Many successful organizations work because they focus on what they do best and use outsourcing to provide the other things they need. Using an HR firm to outsource HR services is one way to do that. For safety management training, outsourcing is often a good option as well.

2. Look for partners: Some organizations tend to underestimate the changes and rate of change that will occur when they outsource certain functions. It is important to select a provider who has established skills and who can assist you with managing and embedding the changes smoothly.

3. The approach: When starting with an outsourced safety management training provider, you should establish the approach, which includes the processes that will be put into place. This should be communicated clearly and concisely.

4. Determine competence: A good outsourced HR services firm or safety manager trainer will have a good understanding of business practices and will get an in-depth understanding of your business in particular. Go with a provider who will take responsibility and be accountable for the training.

5. Communication: Good outsourcing results require an open line of honest communication. To work well, you should make sure that the HR firm you choose understands you well and vice versa.

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New notice requirements for California temporary services employers

There is some important new information for companies in California. California's Wage Theft Prevention Act has recently been amended to include notice requirements for temporary services employers

Under the new law, employers in California have to give nonexempt employees notice of pay details. Besides the pay details, temporary services employers have to also include the name, physical address of hte main office, mailing address (if different), and telephone number of the organization the employee will be performing work. Plus any other information that the labor commissioner requires.

For security services companies that are licensed by the Department of Consumer Affairs, and which only provide security services, these requirements don't apply.

Providing HR Services is a complex business where the rules are constantly changing. This is just another example of how HR outsourcing through an HR Firm can make things easier and more efficient for businesses and organizations of all sizes.

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Recruiting Strategy for Human Resources Companies

There is no doubt that recruiting is one of the most important services provided by human resources companies. As a company attempts to build a recruiting team, it is vital to recognize both the long-term and short-term goals. After determining the hiring strategy of your organization, a recruiting team can be built. It is important that recruiters have an experience manager to report to. Even better, hire a human resources company to head the recruiting team.

At a growing organization, I always recommend hiring recruiters that have at least 3 years. Different talent recruiters have different backgrounds. If you mainly need to hire IT workers, a technical recruiter may be the best choice. To hire sales people, use a sales recruiter. However, a good all-around recruiter can hire people for almost any position. Human resources companies can help with this.

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Human resources outsourcing helps growing businesses

Many business owners are familiar with the frustration that comes with spending too much time on non-revenue-generating tasks. From human resources management and payroll to compensation and benefits, entrepreneurs sometimes spend almost half of their time doing these important but time-consuming things.

Many growing companies have found that it helps use human resources outsourcing. A human resources outsourcing company can handle things like payroll, benefits, and HR functions.

Human Resources Outsourcing firms provide these HR services, which allows the owner and other managers to spend their time working on the things they do best for the company. Things that bring in revenue and keep the company going. It also helps to have an HR professional working as an advocate for both the employees and the owners and managers.

If you are interested in considering outsourcing some or all of your organization's HR functions, human resources outsourcing companies like HumanPoweredBiz offer a variety of different service packages so that they can customize the level of service to fit your specific needs.

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Benefits of outsourced HR consulting

More and more businesses and organizations of all kinds and sizes are choosing to save money and operate more efficiently by using HR consulting and HR outsourcing. Some of the functions that HR Firms can provide include:

Drafting Staff Memos & Policies

Employee Performance Reviews Onsite or Offsite

Employee Job Description Review & Development

Employee Discipline and Termination Processing

Customized Employee Handbook Tailored Specifically for your Business

HR Project Support Onsite or Offsite

Labor & Employment Law Consultation

Federal & State Labor Law Posters

Cobra Administration

401(k) Administration & Consulting

Workers Compensation

Short & Long Term Disability Insurance

SB198 Assistance - An Injury Illness Preventive Procedure Manual

HR Services are an invaluable part of an organization's overall wellbeing. Human Resources Companies, which provide Human Resource Management Services, keep the lines of communication and understanding open between a company's employees, managers, and owners.

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HR Department Survey Results 2012

The latest "Your HR Department" survey from BLR has been released showing the latest stats on HR services for companies of various sizes.

The survey shows that small HR departments are common based on the employee ratio to labor relations.

The majority of HR services professionals provide guidance to small or medium size companies. Around 60% provide HR services to a workforce between 1 and 250 employees. 16% provide HR services to between 251 and 500 employees.

In the labor relations category, 18% of companies have employees who belong to a union.

The survey shows that 16% of HR departments have been reduced in size and their departmental budgets have been reduced. Human Resources Outsourcing is a great way to reduce costs in this area.

In most companies, the HR services professionals are responsible for benefits, compliance guidance, recruiting and staffing, and compensation. Less than half of the respondents are responsible for safety and security.

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Nonprofits outsource their HR services

Check out this article on hawaiibusiness.com about how non-profits, small, and medium sized businesses in Hawaii are saving money by outsourcing their HR.

The article points out that more and more nonprofits, like Aloha United Way and Kalihi-Palama Health Center, have realized significant savings by using human resources companies they have outsourced.

AUW president and CEO Kim Gennaula says that working with ProService allows the nonprofit to offer the same healthcare coverage and HR services as before, while cutting costs.

"As far as any downside, so far there is not any," Gennaula says. In fact, hiring ProService in January 2012, she says, allowed AUW to focus more on donor programs and other aspects of its mission.

The article goes on to say that in the weak economy, nonprofits are increasingly choosing to outsource human resources to PEOs, or professional employer organizations. A strategic accounts officer at ProService Hawaii says the HR departments at many nonprofits and small companies have been overburdened.

"Outsourcing has always been a good idea for nonprofits, but the economy has forced them to look at more options," Ancheta says. "Nonprofits have looked for ways not just to save money, but to focus their best people on generating revenue."

"Whether it be taking responsibility for HR, accounting or staffing, it can streamline a nonprofit's operations, increase productivity and help the entire organization refocus its passion on its core mission and vision," Delaney says.

Nonprofits seek help with HR administration, payroll administration and payroll taxes, recruitment and hiring support.

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More employers plan to outsource HR services

According to a recent survery, 31% of organizations will increase their spending on HR technology in the next 12 months to improve growth and efficiency.

More than 50% of survery respondents said they intend to match the previous year's investment levels in the next year. Very few companies intend to reduce spending on HR technology.

The main reasons cited for these changes were to: create greater efficiency in the department; to encourage collaboration of processes and investment; and to improve quality and lower costs.

The survey of HR and HR IT executives from 628 global organisations also found that, in addition to investment, more organisations were looking to change the structure of their HR functions within the next few years in order to deliver HR services effectively.

Nearly half (44%) of organisations said that they were planning a major restructure of their HR function, an increase on last year when 26% of respondents indicated they intended to do so.

Of those employers making changes to the HR structure, 39% plan to move or revert to a shared-services environment, 31% are looking to increase the number of shared services used and 26% intend to outsource additional HR functions

Outsourcing HR services can help organizations increase their efficiency dramatically.

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Social media policy for employees

According to a recent article in the Sacramento Bee: "For employers that are concerned about the risk of problems arising from the use of social media in the workplace, training your staff on policies and practices will set clear guidelines and lessen the risk of misuse, says Guthrie. "There are legitimate work-related purposes to which these channels are being used. Employees should be trained to do more of this, employers should not make it harder. Social media is here to stay, and whether you embrace it or fend it off, your business will be impacted," she adds. "There is a world of conversation and engagement that's happening right now - with or without you."

Some companies have found success by encouraging employees to utilize social media to keep up with company events, recruit talent and gain a deeper understanding of their customers, and network.

"We've found many ways to integrate social media tools into the fabric of our business. From being active on Twitter, to posting fresh content several times a week on our corporate blog, to sharing videos on our YouTube channel, to setting up LinkedIn groups that bring people with similar interests together, to keeping everyone updated via Facebook.  We truly believe in the incorporation of social networking technologies," says one HR services professional.

"Indeed, we not only encourage our employees to help us engage people online, but we also use instant messaging and the intranet as tools employees can use to share and collaborate with each other internally."

A good HR services professional can help any company establish their own social media policies.

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More and more companies outsourcing HR services

More and more companies, including Fortune 1000 companies are choosing to outsource their HR Services, according to a study by Accenture.

The study showed that the trend to outsource HR is due to pressure for companies to reduce costs, improve service to employees, and maximize efficiency.

According to the lead researcher, "Companies expect a variety of benefits from outsourcing HR, and for the most part they are getting very good results."

"Companies have clearly demonstrated that they are under increasing pressure to generate revenues, and outsourcing support functions such as human resources can help them do so," said David Clinton. "When tied closely to business goals and properly executed, outsourcing has been shown to help companies gain access to additional expertise, cut costs, improve efficiency, and achieve their growth and profitability goals."