Outsourcing HR Functions-I finally get it

Every time I used to hear “outsourcing” and “HR” in the same sentence, I would cringe. I guess that’s because because I’ve seen it done poorly before and don’t want to let go of the responsibilities I took on when I started in an HR role. Now I’m hitting a wall with what I can do and outsourcing (or automating) is looking like a more viable option.

Here’s the scoop

I’m in a small company. We have right at 60 employees right now, so pretty much everything HR is done by me or my manager. Recently I’ve been looking at performance management tools to help reduce our administration and labor costs associated with that process. I was set on a tool, and then a wrinkle was thrown into the process when a benefits broker reached out to take over our benefits administration. And then I found an ATS that I like, because it will help reduce some of my time and labor involved with the recruiting process.

My options

Automate our performance management process-saves the operations staff some of their admin time, saves all the hassle of paper shuffling and storage, and helps us to easily see some of the analytics tied into the process. The downside? I have to train everyone on how to use the tools, and I’m not sure that will go as smoothly as I would like, because half of our managers are out of state.

Outsource our benefits administration-again, saves the operations staff some of the time and effort, but otherwise it doesn’t impact our employees in a meaningful way (other than freeing me up to do things like training, leadership development, etc.). The downside? The cost is actually more than the performance management system. Yikes. So those are the two options I’m wrestling with right now.

Here is how we are going to tackle it as the operations team. We are going to put together a chart with all of the labor hours tied to these items and then see where and how we can automate for the lowest cost but highest value/yield.

Riveting, huh?

If you’ve ever been through this process, I’d like to hear your ideas and thoughts on how it went well, how it went wrong, and what you would do differently next time.

3 thoughts on “Outsourcing HR Functions-I finally get it

  1. Ben Post author

    Isn’t there some natural law against using “sexy” and “HR” in the same sentence? ;-)

  2. Naomi Bloom

    You’ve embarked on the game of whack-a-mole from which there will be release. My suggestion, for such a small company, is that you consider a comprehensive outsourcing arrangement with a single vendor to include payroll, benefits admin, basic HR recordkeeping and compliance, and get all the admin stuff off your plate. Options include Workplace from Ultimate (if they’ll go below 100), ADP’s lower end offering, OneSource VHR (which runs on Workday but can template for small companies and have a sister PEO company to pick up benefits) or similar. Then try something simple in performance, like Rypple. The less time you spend on the admin stuff, the better, but handling multiple providers will suck all the air out of whatever else you want to do. Just sayin’

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