It's a new year and this often means change. One beneficial change can be the move to outsource your HR management functions. And you won't be alone.
It has been a rising trend among American businesses and indications are that outsourcing various aspects of HR management, especially payroll management, will continue to increase.
One reason for this is another rising trend of increased regulation, complexity and compliance demands being placed on HR professionals. The ongoing flood of new labor laws along with the changing payroll requirements threaten to overwhelm many businesses.
Outsourcing is a common approach, but one that still concerns many business owners. Understanding the basic concept is important when considering the option to outsource some or most of your HR functions. According to an article from the Society for Human Resource Management:
HR outsourcing is a contractual agreement between an employer and an external third-party provider whereby the employer transfers the management of, and responsibility for, certain HR functions to the external provider. The options can be as specific as outsourcing one particular aspect of one HR function—such as applicant tracking for affirmative action purposes—or as broad as outsourcing the entire human resource department.
Many Businesses Are Going Outside With HR and Payroll Management
According to a 2014 Deloitte survey the top three areas that businesses in the U.S. planned to outsource were:
- (38%) HR Administration
- (36%) Payroll Time and Administration
- (32%) HR Reporting
In addition, at the time of the survey, 34 percent of respondents said that their company already outsourced their HR Information Systems management, with a further 29 percent of respondents saying they were planning to outsource the service in the future.
Payroll Management Statistics Among U.S. Companies
This graphic illustrates some of the more significant trends in the last three years:
Why Outsourcing is a Preferred Approach to HR and Payroll Management
Paul McDonald, a Robert Half senior executive director, recently noted:
“What’s striking is the continuing high percentage of companies that rely on manual reconciliation of accounts—some with thousands of general ledger accounts.There is a significant opportunity for these firms to streamline the close and use their resources more efficiently.”
One of the problems many companies are facing is a rising trend in overtime hours needed to meet the demands of increased compliance.
In their 2013 survey, Robert Half and the Financial Executives Research Foundation, found that among the U.S. firms who responded, accounting and finance managers average 47 hours of work per week, while non-management staff averages 42 hours per week.
And these numbers are expected to increase as these trend continue.
Outsourcing Your HR and Payroll Management Processes
Considering alternatives such as outsourcing is increasingly becoming a cost-effective and strategic option. Accuchex can help you in managing your HR needs, payroll processes, and staying on top of compliance demands.
At some point in the growth of your company it makes sense to consider other options for maintaining and managing the vast number of tasks and functions that fall under the HR department. While newer software and automation are certainly viable and beneficial options, it can often be far more cost-effective to outsource.
If you are considering outsourcing some or all of your payroll processes, give us a call. Let Accuchex help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.