Human Resource Outsourcing (HROs) enables clients to cost-effectively outsource the management of human resources systems including recruitment & selection, compensation & benefits, performance management, workers’ compensation claims and unemployment insurance claims. HRO clients are able to fully focus on their core competencies to maintain and grow their bottom line.
Any business or organization with employees can find value in an HRO relationship. An average client of an HRO is a business with 19 worksite employees. Increasingly, larger businesses also are finding value in an HRO arrangement, because HROs offer a high level of expertise in HR management, implementation and administration. HROs can partner with companies that have 500 or more employees and work in conjunction with their existing human resources department.
HRO clients include many different types of businesses ranging from accounting firms to high-tech companies and small manufacturers. Many different types of professionals, including doctors, retailers, mechanics, engineers and plumbers, also benefit from HRO services.
Once a client company contracts with an HRO, the HRO will then assume some or all of the administrative oversight of the client’s internal HR functions. In the HRO arrangement between a worksite employee and a client company, there are several operational models to choose from. One model functions the same as an internal department of HR would. The HRO and client company share and allocate responsibilities for the development of human resource procedures and policies, with the HR in an advisory only capacity. The HRO assumes much of the responsibility for the business of employment, such as recruitment & selection, policies & procedures, compliance, performance management systems, compensation & benefits, and risk management. The client company retains responsibility for and manages product development and production, business operations, marketing, sales, and service. The HRO and the client will share certain responsibilities for employment law compliance.
Business owners want to focus their time and energy on the “business of their business” and not on the “business of employment.” As businesses grow, most owners do not have the necessary human resource training, the knowledge of regulatory compliance, or the backgrounds in risk management, insurance and employee benefit programs to meet the demands of being an employer. HROs give small-group markets access to many benefits and employment amenities they would not have otherwise.
No. The client retains ownership of the company and control over its operations. The HRO and client will contractually share or allocate employer responsibilities and liabilities. The HRO will generally only assume responsibilities and liabilities associated with a “general” employer for purposes of administration. The client will continue to have responsibility for worksite safety and compliance. Because the HRO also may be responsible for workers’ compensation administration, many HROs also focus on and improve safety and compliance. In general terms, the HRO will focus on employment-related issues and the client will be responsible for the actual business operations.
The HRO’s economy of scale enables each client company to lower employment costs and increase the business’s bottom line. The client can maintain a simple in-house HR infrastructure or none at all by relying on the HRO. The client also can reduce hiring overhead. The professionals at the HRO can provide critical assistance with employer compliance, which helps protect the client against liability. In addition, the HRO provides time savings by handling routine and redundant tasks for its clients. This enables the business owner to focus on the company’s core competency and grow its bottom line.
Job satisfaction and productivity increase when employees are provided with professional human resource services, training, employee manuals, safety services and improved communications all of which reduces conflict, complaints, and perceived unfairness.
HROs assume administrative responsibility for payment of wages and compliance with the rules and regulations governing the reporting and payment of federal and state wages. We advise our clients with respect to the payment of overtime (OT) and compensatory time, and what positions are exempt from the provisions of the FLSA and state OT rules.
As a professional HRO, Working Solutions provides advice and implementation of policies and procedures that meet federal, state, and local employment laws. Working Solutions is insured for professional liability concerning this advice and is covered for up to 1 million dollars per event. As employers, clients retain responsibility for compliance however risks and exposure are substantially reduced by utilizing the expertise and insurance of Working Solutions, LLC., including federal, state, and local discrimination laws, Title VII of the 1964 Civil Rights Act, Age Discrimination in Employment Act, ADA, FMLA, HIPAA, Equal Pay Act, and COBRA.
No. HROs work equally well in union and non-union worksites. Where a collective bargaining agreement exists, HROs fully abide by the agreement’s terms. HROs endorse the rights of employees to organize, or not organize, under state and federal laws.
“Small businesses should and can be afforded professional HR expertise in a cost effective manner so that, no matter how small, they can manage their human resources and employment risks as effectively as large organizations.”
Rebecca Doane, MBAWorking Solutions