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Author: Mario Apruzzese - Employees Only Your Human Resource Department 248.276.0950 | www.EmployeesOnly.net eBook– HR Outsourcing 101
Author: Mario Apruzzese - Employees Only
Your Human Resource Department 248.276.0950 | www.EmployeesOnly.net
eBook– HR Outsourcing 101
www.EmployeesOnly.net | 248.276.0950
eBook – HR Outsourcing 101
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Table of Contents
Who is Employees Only……………………………………………………………………………....3
HR Outsourcing Definitions…………….………………………………………………………….4
Components of an HR Outsourcing Solution.……………………………………………....6
3 Categories of Employee Expenses – How Outsourcing can Help……………….…..7
What does it cost for an HR Outsourcing Solution…………………………………………8
HR Outsourcing Impact on HR Professionals…………………………………………….…10
Supporting an HR Outsourcing Solution...............................................................11
Conclusion………………………………………………………………………………………………..12
About the Author………………………………………………………………………………………13
Did you know that 2 to 3 million employees are covered by an Professional Employee Outsourcing arrangement (source: NAPEO.org)?
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Employees Only provides Human Resources Outsourcing (HRO) solutions consisting of a combination of Professional Employee Outsourcing (PEO), Employee Leasing and Administrative Solution Outsourcing (ASO). We work with business owners, HR Managers and company Presidents who are frustrated with administrative tasks that do not create revenue, are tired of managing benefits and employee issues and are interested in making improvements in their organization that result in increased profit. More information can be found at www.EmployeesOnly.net
Who is Employees Only?
Employees Only (EO) was established in 1996 with a primary focus on supporting the growth of Michigan organizations through outsourcing non-core employee administration so that business owners can focus on growing their businesses. We currently service clients with employees in over 20 states, including European companies doing business in the U.S. We have a staff of experienced HR, Benefits, Payroll and Workers Compensation industry professionals that manage and support our clients.
Founded in 1996 | Headquartered in Rochester, MI Work with companies from 3 to 3000 employees while maintaining a 93%+ client
retention rate Offer proprietary health and benefit plans not available anywhere else through strategic
partners like Guardian, Cigna and Legal Shield Industry leader with most HRO awards in Michigan for HR Best Practices, 1st HRO
provider to institute a client scorecard and offer access to the best technology within HRO
Fast Facts
What We Do
About Us
EO Award Wall
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Definitions of the Available HR Outsourcing Models
Simply put, the relationship between an employer and employee can take on different attributes. Traditionally, an employer hires an employee and that relationship is subject to standard federal labor laws. When the relationship between an employer and employee is outsourced, federal labor laws still apply however the burden of risk changes as well as which party is responsible for what relating to benefits administration, payroll services, insurance, HR matters, taxes, training, etc. When the employee relationship is outsourced, there are benefits that can be realized by the employer, the employee and the outsourcing firm.
HR Outsourcing Definitions
A custom plan that includes the specific HR services and HR projects on an ala carte basis.
We can help your organization manage its human resources and employment liabilities, as well as reduce risk exposure, while lowering your costs by placing employees in a co-employment arrangement with us.
The same comprehensive HR services performed under a PEO arrangement can be achieved while your employer status is retained. Your payroll, benefits and reporting of employees activates are managed by Employees Only.
Our organization becomes the sole employer of record to accomplish specific goals and access to programs by clearly defining sole employer status to ensure that access to, and selection of, benefits and retirement plans are in the control of Employees Only and your company.
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Advantages of Each Model
Each employee outsourcing model has different advantages. Typically, the services are almost the same but the burden of risk, costs, roles/responsibility, cost savings opportunity and general direction to the employee are different. Here is a quick summary for each outsourcing model:
Approximately 250,000 small and mid-sized businesses are part of PEO arrangements (source: NAPEO.org).
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Components of an HR Outsourcing Solution If you are new to the idea of outsourcing part of all of your Human Resources needs, you might be wondering “what will I get”? The below illustration depicts the components of an Human Resources Outsourcing solution. Note that some components may differ based on the agreement you have with the Human Resources Outsourcing company.
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3 Categories of Employee Expenses – How Outsourcing Can Help
Let’s take a look at the typical expenses related to a single employee and whether or not outsourcing provides an opportunity to not only reduce the expense but also help in other areas. After reviewing the expenses of a single employee, think about how these expenses can grow as more employees are added and the overall management of these employees becomes more complex.
Whether or not you decide to outsource your employee management needs, there are always going to be costs and time considerations involved when you have employees working for you. The question is how deep do you want to go with managing the employees or would you prefer to bring in a 3rd party expert to assist while you focus on your core business?
According to the Society for Human Resources Management, more than 1 in 4 employers are on the hunt for HR help.
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What does it cost for a Human Resources Outsourcing Solution? A common question we are asked is, how much does it cost? Well, let’s first assume that “it” does not refer to Information Technology but rather some sort of a human resource outsourcing solution. The answer to the question, as you can probably imagine, is a big “it depends”. Every spring, homeowners (and owners of lawn companies) start to think about lawn maintenance, the services needed and what it might cost. As you know, each yard is different and therefore the costs for lawn maintenance varies by yard or home (ex. some yards are bigger than others while some yards just need a cut once week while others need bushes trimmed, edging, fertilization or are tough to navigate). Pricing a human resource outsourcing solution is similar in nature as you first must determine the specific needs and then you can put together a price or quote. As illustrated below, pricing for lawn maintenance is similar to pricing a human resource outsourcing solution.
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Thinking about outsourcing some or all of your human resource needs or simply have a project that you need help with? Be prepared to answer the questions below so that your HR partner can provide you with the best price possible based on the information that they have. Being prepared with answers to these questions will not only provide you with the best quote possible but will also speed the process along.
Cost Checklist How many employees do you have? How often do you run payroll? What restrictions currently exist? What are your Workers’ Compensation and/or Insurance needs? What benefit options do you want to provide to your employees? Do you spend too much time on HR related activities? Would you benefit from utilizing an HR Technology?
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HR Outsourcing’s Impact on HR Professionals?
If you are an HR Manager, HR Director or HR Vice President then outsourcing of HR functions might seem redundant considering you work in HR. However, we recommend you take a closer look at your daily, weekly and monthly activities and where you have the greatest opportunity to add the most value to your company while reducing your overall day-to-day burden of HR tasks. Do administrative tasks add the most value to your company or can you improve you company’s bottom line by taking a deep understanding of what your company does and apply that understanding in an HR context? Think of it this way, how much more value could you add to your company if items like payroll processing, insurance claims/questions, audits and simple paperwork were removed from your daily or weekly set of tasks? The time savings could be put toward more strategic items such as recruiting better candidates who can come onboard and are able to contribute 25% quicker than the current benchmark or completing that succession plan that continues to go on hold or simply spending time making your annual review process more streamlined and productive. We have outlined 3 levels of HR in the below graphic. After reviewing, where do you see the biggest opportunity to impact your company and provide the greatest return on investment?
A People Expert
A Strategist
A Benefits Guru
A Good Listener
The 401k Admin
The Policy Enforcer
An HR Generalist
Today I must be:
Are you a busy HR Professional?
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One of the main advantages of any HR Outsourcing Solution is that you are not alone. Typically, you are backed by a Team of HR subject matter experts. This means that if you have an HR, Payroll, Benefits, Workers’ Compensation, etc all you have to do is pick up the phone.
Below is a graphic depiction of a typical Service Delivery Model and how easy it is to get the support you need.
In addition to how solutions are delivered, the are tools available that you might not normally have access to. These types of tools might include:
• HR Technology for payments, changing benefit elections, tracking time off, etc. • Scorecards or dashboards that show you the status of your HR initiatives • Employees Handbooks which speak to your policies and procedures for employees • Time tracking software • Integration between HR Technology and any databases you currently have that store employee
related information
Supporting an HR Outsourcing Solution
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Choosing an HR outsourcing model for your business is a big decision. The good news is that if you are considering an HR outsourcing model and you’ve made it this far in the white paper, your business must be headed in the right direction. This is a good problem to have!
As you weigh all of your options, feel free to give me and the Team at Employees Only a call. We would be happy to take a deeper dive into the HR models that are available and would love to provide you with a free, no obligation quote.
Additional information about HR outsourcing models, including the PEO model can be found on these industry leading sites:
• NAPEO – www.NAPEO.org
• Society for Human Resource Management (SHRM) – www.shrm.org
• HRZone – www.hrzone.com
Conclusion
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About the Author
Mario Apruzzese, CEO/Owner of Employees Only
Mario Apruzzese, CPA is the founder, and CEO of Employees Only, headquartered in Rochester, Michigan. Mr. Apruzzese is an accomplished business leader, speaker and is active in the business and non- profit community having served or currently serving on several Boards, including; President, Detroit Athletic Club, DAC Foundation Board, Rainbow Connection, officer, Past President of the Detroit chapter of the MACPA, and serves as the first President of the Foundation Board for the Society of St. Vincent de Paul. He is a two-time nominee for Entrepreneur of the Year and was recently awarded for 2012 Outstanding Commitment in Philanthropy by the Association of Fundraising Professionals Greater Detroit Chapter and recognized as 2013 Entrepreneur of Distinction by Corp! Magazine.
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