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OUTSOURCING HUMAN RESOURCES FUNCTION

When considering outsourcing, where should I begin?

You should begin working with the consultant who will provide the HR support personally or act as a liaison with other service providers. Make sure that your consultant is the type of person you would consider hiring as your own Vice President – Human Resources, if you were a large enough company to have one.

How do I know what functions to outsource?

Your consultant will walk you through each of the functions and provide options for you. In some cases, you may keep an individual broker to handle workman’s compensation coverage, and in others you may want to engage a Professional Employer Organization (PEO) to handle all insurance coverage related to Human Resources. The consultant will assist you in identifying the factors that will make the difference in your decision.

I have heard a little about PEO’s. What are they?

A PEO is one form of outsourcing. The following definition is from the National Association of Professional Employer Organizations: “A PEO is a company which contractually assumes and manages critical human resource and personnel responsibilities and employer risks for its small to midsized businesses by establishing and maintaining an employer relationship with worksite employees.”

Can you be a little more specific about PEO activities?

Patrick Geschwind & Associates works with a PEO who lists 76 bullet points under four broad categories of HR administration. Listed below is a very small sample of those 76 bullet points under the four broad categories.

HUMAN RESOURCE SERVICES

Develop customized employee handbooks and update as needed
Provide primary employee job descriptions
Assist with placement of classified ads
Assistance in managing and resolving employee conflicts
Provide legally required government postings

WORKERS’ COMPENSATION AND LOSS CONTROL SERVICES

Negotiate workers’ compensation insurance coverage
Eliminate workers’ compensation audit and audit premium
Provide risk management and safety inspections
Provide periodic safety training

EMPLOYEE BENEFITS AND SERVICES

Reduce time spent procuring and administering employee benefit plans
Enroll employees in benefit plans
Respond to employee benefit inquiries, claims and other needs
Administer Section 125 plan; assume liability and fiduciary responsibility

PAYROLL ADMINSITRATION

Store employee files and records
Produce and print all employee paychecks
Direct deposit all employee paychecks
Answer employee inquiries
Handle all standard and non-standard payroll deductions

For all these services, a PEO must be very expensive?

Like other services you choose to outsource, a PEO is a cost effective method of procuring needed and desired services for your employees. A first class PEO may represent over 200 companies with 5, 000 plus employees. When this PEO negotiates rates and services from medical, dental, vision and disability insurance providers, it is negotiating on the strength of a 5,000 employee company.

What other benefits derive from working with a PEO?

Because of its “co-employment” status, a PEO assumes some employee liability. Patrick Geschwind & Associates’ PEO partner provides Employment Practices Liability Insurance (EPLI), included in its management fee.

Am I turning over my company to HR folks?

It is just the opposite. You are hiring a firm to handle important parts of running your business. You do the same thing when you hire an attorney, a CPA or an IT professional. You still run the company and make all the final decisions. Outsourcing HR may just allow you to have the time to MIND YOUR OWN BUSINESS!

How do I find out more?

Call Patrick Geschwind on 816-525-9988 or e-mail him at Patrick@besthrfix.com to request a free consultation.

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