Human Resource Services & categories

A human resources department is an important part of employee well-being in any business, no matter how small. HR responsibilities include payroll, benefits, recruiting, firing, and keeping up to date with state and federal tax laws.

Any mix-up concerning these problems can cause serious legal problems for your business, as well as major employee dissatisfaction. But small businesses often don't have the budget to handle the nitty-gritty details of HR. Because of this, more and more small businesses are starting to outsource their HR wants. The hr outsourcing companies pool thousands of businesses together. hr outsourcing services generally fall into four categories: PEOs, BPOs, ASPs or e-services.

A Professional Employer Organization (PEO) presumes entire responsibility for your company's HR administration. It becomes a co-employer of your company's workers by taking whole legal authority of your employees, including having the final say in recruiting, firing, and the amount of money employees make. The PEO and business owner become partners, essentially, with the PEO handling all the HR aspects and the business handling all other aspects of the company.

By proper definition, a service is only a PEO when it takes legal authority for employees. But take note some HR outsourcing services like to use the identified concept "PEO" when they handle the primary aspects of HR like payroll and benefits, yet don't take this legal partnership.

Business Process Outsourcing (BPO) is a broad term referring to outsourcing in all sectors, not just HR. A BPO separates itself by either putting in new technology to existing technology in a new way to improve a process. Only in HR, a BPO would make sure a company's HR system is supported by the new technologies, such as self-access and HR data warehousing.

Application service providers (ASPs)  Some are well-known packaged applications (People Soft) while others are customized HR software developed by the vendor. These software programs can handle payroll, benefits and more.

E-services are those HR services that are web-based. Both BPOs and ASPs are often referred to as e-services.

It's crucial that you understand these service terms, but don't get too important issue by the names when interviewing potential outsourcing firms. The key to recruiting the right outsourcing company is knowing what services your company requires and then find an outsourcing firm that can provide them.

When you outsource HR functions, some services go with the "all-or-nothing" approach, wanting that they handle all your HR functions or none at all. Typical services include:

Payroll administration, including produce checks, handling taxes, and dealing with sick time and vacation time.

Employee benefits, including health, medical and life insurance, 401(k) plans and cafeteria plans.

HR management, including recruiting, hiring and firing. This contains background interviews, exit interviews and wage reviews.

Risk management, containing workers compensation, dispute resolution, safety inspection, office policies and handbooks.

Some services are full-service and will provide these as well as more services like hr consulting services, who will come in to train or even settle a dispute.

Online services need to be limited in their offerings, but you'll get added options like web access, which will permit you to view information (like benefits packages) and even make changes to such information online. Most will give you and your employees access to view their benefits plans, enroll in benefits, read policies, and make changes to current data.