If you’ve been running a small business for any amount of time, you know how challenging it can be to grow your organization and keep up with all that goes along with that growth. As you may have already discovered, it isn’t always easy to be both a good employer and a good HR decision-maker.
Most business owners are knowledgeable in the area where they do business, but not necessarily experts in HR rules and regulations. If you’re not careful, HR violations can cost you—and they’re changing all the time. Feel overwhelmed? We can help.
Dedicating Staff to HR
One roadblock we often hear about is the difficulty of HR staffing. In many small businesses, the job of managing HR is often just one of many responsibilities of the person performing the work. Sometimes it’s an office manager, a family member or friend, or an operations person—all of whom wear multiple hats.
Sometimes, the owners themselves fit things in when possible and put out fires along the way. Seldom do small companies have the resources necessary to understand and keep up with all aspects of HR. We’re talking everything from payroll, taxes, insurance, best practices, documentation, hiring/retention, benefits and legal compliance with HR laws.
Hiring qualified HR professionals is a challenge for many businesses. The obvious challenge is the overhead expense. Furthermore, in certain parts of the country, there’s a real shortage of trained professionals to meet your needs, particularly at the entry level. Once you’ve hired and trained them, they may be looking for their next opportunity fairly quickly. The best idea for your business could be to simply outsource HR.
Outsourcing HR allows you to get what you need at a price you can afford. The expense challenge is a real one and not one that can be overcome by hiring more staff. Whether you outsource the entire HR function or limit your staff to one or several people responsible for HR with help from outside professionals, a range of affordable outsourcing options exists.
Many businesses start by outsourcing payroll. While this is great in reducing workload, it doesn’t begin to address the risks to your business in terms of HR liabilities such as: accurately classifying your employees, properly paying them (including overtime and wage garnishments), paying state and federal taxes, and more.
Furthermore, with just a payroll service, you will still lack the resources for other areas of HR such as policy, employee handbooks, regulatory compliance with employment laws, benefits administration, workers’ compensation and more.
This is where a PEO (professional employer organization) can assist in a broader sense. PEOs become co-employers and assume many of the responsibilities of being an employer, often at a price point that is less than doing things yourself. This can give you the expertise and specialization you need for a fraction of the price of hiring dedicated staff.