3 Ways to Reduce Employment Costs With Human Resources Outsourcing

The Human Resources Outsourcing industry remains strong through the weak economic recovery. Recent studies indicate that associations, both large and small, possibly already have an HRO connection and intend to expand it, or are contemplating one in the coming year. The poll conducted by HfS Research and the London School of Economics, finds that 31% of business already outsource human resources and are looking to increase outsourced services during the next year. An additional 15 percent do not currently outsource, however, are looking to start outsourcing different HR functions in the forthcoming twelve months.
What is the catalyst for these businesses to outsource human resources?
It is no secret that in lean economic times, business owners are pressed to spot expenses within a company which may be reduced or diminished. Employment overhead (payroll, taxation, employees' compensation insurance, employee benefits, governmental compliance, and other employee-related cost centers) typically comprise the single highest area of expense within a company. By engaging a human resources outsourcing firm, the business owner is able to reduce employment costs in three primary ways.

HRO firms offer streamlined human resource systems to their clients, significantly minimizing management's time in overseeing daily administrative tasks. HR Outsource Service -productive "paper pushing" can be outsourced to the HR firm, enabling key staff to focus on their core competencies. Processes such as payroll processing, tax filing and compliance, Unemployment Claims administration, workers' compensation management, and employee benefits enrollment and management can all easily and efficiently be outsourced. The HRO company rolls the customer's administrative processes into their current systems, offering smooth management in a fraction of the cost.
Cost effective insurance products.
Small companies are at a substantial disadvantage in regards to buying insurance products for their employees. Both employees' Human Resources Outsourcing insurance and employee benefits have become a significant financial burden on employers. While a small company is restricted in the range of benefit plans and insurance offers they can provide, HR Outsourcing firms forge relationships with large regional and national insurance companies. Through these connections, and the consequent economies-of-scale, HROs offer their customers wealthier, cheaper insurance programs.
Reducing employment risks
Government regulations and compliance continue to increase in complexity and scale. Month after month, new case law is made and many of these decisions directly affect companies on earth. From wage and hour issues, to discrimination limitations, to protected classes of employees and new handicap guidelines, employers often walk through a minefield of danger. Without committed human resources employees or legal counsel, it's likely a company will have to deal with some form of an employment litigation in the coming years that can costs tens-of-thousands of bucks. With close to 100,000 employment claims registered in 2010 (the greatest on record!) , companies recognize the risk and therefore are turning to Human Resource Outsourcing firms to assist them in managing these risks. HR companies employ teams of specialists at a wide range of disciplines and are able to provide timely and accurate guidance to assist their clients avoid expensive employment suits.