Outsourcing HR can grow your business

Consider the size of your company.
If your business has eight employees or more, outsourcing HR can be cost-effective, experts and small-business owners say.

"With 20 employees, it's cheaper and more effective to outsource HR," said Frank Sabella, the controller for International Facilities North, a business insurance aggregator that uses SharedHR ($675 per month for up to 100 employees, plus $75 per additional state) for its employees. "You have access to a larger range of HR services for hiring, recruitment, terminations, and legal issues," Sabella said.

If you have fewer than eight employees but still want to remove some of the administrative headache, consider a regular payroll service, such as QuickBooks Assisted Payroll (part of Payroll.com) ($59 per month), which helps you with taxes and filings.

Offer competitive benefits.
Mike Sobolik is the finance director at Roving Planet, a 30-person network software company. The company takes advantage of TriNet's entire customer base for buying power, letting it secure a more affordable and comprehensive benefits package than it could get on its own.

"We have eight health care programs, 401(k) programs, Delta dental, and a vision plan. We have what you would call 'big company' benefits," Sobolik said. (TriNet's pricing varies based on geographic location and workers' compensation laws; contact TriNet here for details.)

Recruit top talent.
"For the cost of half an admin and fees equivalent to half a regular position, we're getting a fully loaded HR team, and our employees are better off as well," Sobolik said. "It's a recruitment advantage. When you have a 30-person firm that's venture funded and yet you can tell prospective employees you have a world-class benefits package, it helps."

Roving Planet has an administrative assistant who handles employee HR questions (among other duties), but nearly everything goes through TriNet.

Give power to your employees.
If you have a multitiered management structure, look at packages, such as SharedHR, that let you give different levels of access to different employees. A regular employee can log in to check benefits, tax information, and available vacation days. A supervisor can view his or her own benefits plus those of the team, whereas a manager or administrator can see the entire company picture.

Many HR firms, such as TriNet, also include toll-free numbers for your employees to use, or at least for managers and administrators, as SharedHR does.

Relieve the administrative burden.
Sabella found that outsourcing HR increased the administrative staff's productivity. "Without it, you end up spending a lot of time on paperwork with employee files, such as hires, fires, and locating documents," he added.

Online access means your employees can find the answers to questions themselves; a help-desk number can help field larger issues. "All of our employees can go online and work with TriNet's help-desk resource to solve problems," added Sobolik. "It was clearly a value-add over and above what a straight payroll service would have given us."

Stay in legal compliance.
SharedHR keeps an online library of documents for job applications, mandatory employer postings, and more, and Sabella's employees can access it. SharedHR also helped develop his company's employee manual. New employees have to read the manual and indicate online that they've read it.

"Compliance is a real issue," Sabella said. "It can have a positive impact on your liability situation if you're compliant with regulations."