#utsourcing HR functions

[escalonservices]

The goal of every entrepreneurial venture is to expand gradually and globally. Unfortunately, even the most well-meaning startups slip up when it comes to human resources and payroll functions.

Check out these eight HR and payroll mistakes that are often made by startups.

Mistake #1: Not hiring a dedicated HR or payroll person: Often, startup owners let their company’s HR and payroll take a back seat to other issues. Having someone on staff or outsourcing your HR to handle these two crucial functions is a good strategy for any business. Not only can this person help you with several compliance issues, but they can also help you hire, train and conduct new hires onboarding in such a way that you are set up for success.

Mistake #2: Making poor hiring decisions: Small business owners sometimes feel their options are limited when it comes to hiring employees. Because they are a small operation, they feel they might not be able to offer a potential employee as much as an established company. However, a startup needs to get the right staff. Also, they must never forget that startups are dynamic workplaces and have a lot to offer their employees.

Mistake #3: Classifying employees incorrectly: Many a time, startups wrongly classify their staff members to avoid paying taxes and health premiums, or to comply with certain labor laws like paying overtime. However, they can get into a lot of trouble with the IRS if they do not categorize their employees properly, and may end up paying hefty fines. For instance, under Labor Code section 226.8, which “prohibits the willful misclassification of individuals as independent contractors, there are civil penalties of between $5,000 and $25,000 per violation.”

Mistake #4: Mixing personal and business finances: Mixing personal and company expenses is one of the top payroll mistakes made by startup owners. This usually happens because startups do not make a ton of profit when they are starting and end up paying employees from their own pocket.

This short-term fix can have a severe long-term impact on their business, as the company will eventually have to clean up its accounts and pay necessary taxes. Also, if the firm is audited or sued (and loses), the court may direct the founder to pay through using personal assets.

Mistake #5: Keeping incomplete records: Companies are required by the Fair Labor Standards Act to keep payroll records for at least three years. These reports must include wage scales, the number of hours worked, payroll processing times and other applicable details required by the law. However, startups sometimes fail to do the needful and are unable to defend their company against future possible litigations and penalties.

Mistake #6: Faulty payment scheduling: Managing payroll can be a complex process, and many startup owners find it challenging to handle payroll taxes at the city, national and federal levels. They end up skipping new employee filings, worker’s compensation, health benefits, Form I-9 or other employment-related provisions.

Mistake #7: Overpaying for underpaying healthcare and benefits payments: One key way of hiring and retaining good employees is to offer them a competitive compensation and benefits package. On the other hand, health insurance premiums can be expensive, especially for startups that pay more for less coverage.

Mistake #8: Ignoring employee development: Employees today want to grow and learn with the organization they work for. This includes ongoing training as well as performance management used to increase productivity and train employees. And not offering employees the opportunity to learn and grow can cause them to leave. Having a solid HR department, or outsourcing HR functions can help you take care of this.

Originally published at https://escalon.services

[shareyourhr]

9 Benefits of Outsourcing HR

Most business owners agree that their employees are their most precious assets. As such, managing human resources has become a critical role in control of a business. Yet for some businesses, the various functions of the HR department are too comprehensive and complex to keep going in-house.

Keep in mind, there are several HR strength areas, including payroll, recruiting, benefits, compliance and more. In some businesses, an HR generalist may be asked to do more than one of these HR functions, and that can often result in less than optimal results.

In these situations, a business can achieve a similar level of efficiency and workforce management by joining a professional employer organization (PEO) and outsourcing HR. The advantages of outsourcing HR are plentiful and can have a significant impact on your bottom line.

Here are the advantages of outsourcing HR functions:

1. Cost Savings

Overhead costs associated with fulfill HR services are typically very high. A fully-functional HR department needs additional office space and highly trained and experienced HR staff. Many small businesses simply can’t afford this expense & find that it’s more cost-effective to outsource HR functions. Outsourcing HR helps decrease your costs & helps you avoid trying to financially maintain non-revenue - generating back-office expenses. Furthermore, HR Outsourcing Companies expenses are variable & can be reduced when business needs warrant.

2. Payroll and Accounting

The cost of outsourcing payroll is very less compared to the cost of maintaining an in-house payroll staff. The outsourced company can be responsible for employee payslips, advising on tax & deduction questions and also offer a payroll analysis for accounting purposes. This frees up time in calculating the payroll and dealing with different and sometimes hard employee situations.

3. Global Talent

One of the great advantages of outsourcing is expanding your perspectives. When HR functions are outsourced to PEO companies, you get your HR services done by the best talent around the globe.

4. Risk Management

Employment and labor laws change regularly, and it can be hard for you to remain up-to-date on regulations that affect your workplace. Outsourcing firms employ HR professionals whose purpose is to stay current on federal & state employment laws. This will help you comply with these laws and avoid expensive lawsuits brought on by employees. HR firms also maintain and audit company policies and practices to ensure your business and your employees’ best interests are protected.

5. Efficiency

Maintaining an efficient and productive workplace is critical. Outsourcing HR functions create better efficiency within HR systems. Advanced human resources technology utilized by outsourcing providers, helps streamline important HR functions such as payroll, advantage administration & compliance management. Outsourcing helps you and your managers spend less time on paperwork and much time dedicated to improving the efficiency and effectiveness of your workforce.

6. Employee Development

Outsourcing HR functions can help you to manage employee performance and development. HR providers implement performance management plans to ensure employees comply with company policies and procedures and successfully meet your organization's goals. Outsourcing firms periodically monitor employee work and report findings to management. This reduces the workload of your managers by minimizing their administrative management.

7. Help with compliance

This is one area where many small companies really struggle to keep up, especially with the changing laws pertaining to hiring, insurance claims management, and benefits regulations. The greatest challenge is that failure to comply can lead to important financial consequences. Outsourcing HR functions to a trusted provider can help you understand and take action to comply with these laws and regulations.

8. Reduce Employment-Related Expenses

While there are hundreds of corporate cost-reducing areas to consider, labor costs account for one of the largest operating expenses in a business. Beyond payroll and tax overhead, other costs are related to health insurance premiums, workers’ compensation insurance, recruiting fees, payroll processing, and legal costs.

9. Health Insurance Benefits

As our economy improves, employers are looking for ways to incentivize & motivate their staff. PEO firms provide small employers the different opportunities to offer their staff a robust and comprehensive array of employee benefits that are typically available to only the largest corporations. These robust offerings add a wide range of major medical plans and voluntary benefit offerings.