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Human Resource
Outsourcing 101

By outsourcing your HR services you can save your small business time and money while helping you to expand, attract and retain better talent, and stay compliant with laws in multiple states.

HR Outsourcing Services for Small Businesses

When you are operating a small business, it is easy to find yourself getting overwhelmed in the back office. Between scheduling, invoicing, accounting, reporting and everything else involved in running your company, it is easy to feel like you are getting buried in a mountain of busy work.

Some of that busy work is going to involve managing human resources. Think how much easier it would be to keep up with the rest of your work if you had someone to handle HR for you.

Even if you cannot afford to hire an in-house HR manager, there is a solution: you can outsource human resources instead.

In this guide, we will go over the benefits of human resources outsourcing for small businesses. That way, you can make an informed decision as to whether HR outsourcing is a good fit for your business or not.

But first, let’s explain a bit more about why you might want to outsource your HR, and what services an HR outsourcing company can provide.

Why do businesses outsource their HR services?

Here are a few reasons to think about outsourcing your human resources:

  • Save time: One of the top reasons to outsource HR is to spend less time managing your own HR. You can then spend that time on other aspects of your business, including tasks that you are more efficient at handling.
  • Avoid mistakes: Especially if you are new to running your own business, it is easy to make expensive and time-consuming HR mistakes—particularly with respect to compliance. By outsourcing, you can work with compliance experts that will help you ensure that you are operating within the letter of the law.
  • Save money: As we mentioned, making mistakes is expensive. Time is money too. By helping you save time and avoid mistakes, an HR outsourcing firm can help your business save a lot of money, improving your bottom line.
  • Run your business more smoothly: With fewer mistakes, hassles and hiccups to worry about, you can keep making smooth progress toward your small business goals with the help of an HR outsourcing firm.
  • Use more advanced technology: You may not feel ready to purchase expensive human resources software suites, but you could benefit from them. When you outsource to a firm that specializes in HR, they may already have access to these programs and tools, and can use them to assist your business.
  • Expand your business: If you are in the process of growing your small trucking business, human resources outsourcing can facilitate that by streamlining your hiring and onboarding procedures. As you begin hiring and operating in additional states, outsourcing experts can help you stay compliant in those states.

If you consider the particular pain points you have dealing with HR concerns right now, you might be able to think of some additional reasons why you would think about outsourcing it.

Types of HR Outsourcing Companies

ASO? HRO? PEO? It is easy to feel like you are wading through alphabet soup when you are looking into HR outsourcing for your small business.

To help you make sense of your options, let’s explore the different types of HR outsourcing companies.

1. ASO

ASO stands for “administrative service offering.” When you work with an ASO, you can have multiple vendors for different services, but the ASO manages them on your behalf. This simplifies your HR operations, since you only need to deal directly with the ASO.

2. HRO

HRO simply stands for “human resources outsourcing” (pretty vague, right?). Another name for an HRO is a BPO, which is short for “Business Process Outsourcing.” If you have an HRO/BPO, you are simply subcontracting HR to that company.

3. PEO

A PEO is a “professional employer organization.” If you decide to work with a PEO, they will be your employer of record. A PEO can provide a full suite of HR services to your small business.

4. Staffing firm

If you only need help with staffing, and nothing else, then instead of working with a PEO, HRO or ASO, it may make more sense for you to simply go through a staffing company. Another name for a staffing agency is a “temp agency.” This is a company that helps to match employers with potential employees who can meet their needs quickly and effectively.

5. Independent contractor

Sometimes it might be advantageous to just contract out a single area of HR to one independent contractor, rather than working with a firm for a set of services.

For example, maybe you can take care of just about everything, but you could use an extra hand just with compliance, or just with payroll, etc. An independent contractor can help you fill that gap without the need to hire them fulltime.

What Services Can an HR Service for Small Business Perform?

Here are some of the services that you can get an HR company to take care of for your small trucking business.

  • Hiring: A human resources outsourcing firm can handle hiring procedures for you partly or in their entirety, depending on your preferences. You can use them to quickly find new drivers and office staff. As the turnover rate for drivers can be high, this is a service you might regularly be availing yourself of.
  • Onboarding: After you hire new drivers and office staff, an HR firm can handle onboarding effectively, getting your new hires quickly up to speed with your business procedures and their duties.
  • Payroll: One of the most popular HR outsourcing services is payroll; in fact, a lot of companies just outsource for payroll and nothing else. Make sure your employees are paid quickly and reliably and that all of your accounting is handled with due diligence by working with a payroll company.
  • Tax compliance: Your HR outsourcing company can also make sure that you are compliant with tax codes every year so you do not underpay.
  • Workplace safety: When you run a small trucking business, workplace safety is going to be one of your biggest ongoing concerns. In fact, you will have a lot more work to do in this area than many businesses in other sectors ever will. Outsourcing it can be a huge help.
  • Benefits: You can outsource all of the work involved in offering your employees benefits. The firm you work with can help you shop plans and administrate them.
  • Workers’ compensation: If your employees ever need to file workers’ comp claims, you can outsource everything related to them, ensuring compliance.
  • UI: Human resources services can ensure that all unemployment insurance (UI) claims are being handled correctly.
  • PTO: Paid time off (PTO) is one of the benefits you might offer your staff. When you outsource, the company you work with can administrate PTO on your behalf.
  • COBRA: Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), employers need to make sure that employees are still able to get group health insurance if they lose their jobs, their hours are reduced, or so forth. Outsourcing allows someone else to handle COBRA plans and compliance for you.
  • Other compliance issues: Along with tax compliance, there are a ton of other areas where you need to make sure you are fully compliant while operating a transportation company. An HR outsourcing firm can be a massive help in navigating compliance issues, especially in other states.
  • Resolving disagreements: Hopefully you will be running a harmonious workplace, but sometimes, conflicts are going to arise. When you outsource, someone else can mediate disputes, allowing you to stay focused on running your business instead of getting caught up in workplace drama.
  • Drug testing: If you choose to engage in drug testing as part of your hiring process or periodically for established workers, then HR outsourcing firms can set it up for you.

Wow! That is a lot of services, right?

But even what we just went over is not exhaustive. While it covers most of what you would likely outsource, there may be some additional HR duties that we did not include on this list that an outsourcing firm could assist you with.

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