Human Resources gained a permanent role in the American workplace during the 1950s, as the evolution of employment-related laws and sociological trends took shape. However, the past 20 years have witnesses an unprecedented rise of employment litigation, labor regulations, and tax laws far beyond the expectation of their originators.

Effectively managing Human Resources has become a daunting and complex task for small to mid-market business owners. U.S. corporations must grapple with one of the most complicated systems of employment laws in the world. This includes a laundry list of unfriendly policies, including laws governing hiring and termination, family leave, sexual harassment, paying employees, leaves of absence, employee benefits, and workers compensation. In just the first months of 2007, dozens of laws dealing with every subject from discrimination to wage deduction have been enacted.

Putting HR in Expert Hands

One solution for frustrated business owners is to turn to Human Resources Outsourcing. An HR Outsourcing firm allows companies to shift responsibility of nonessential jobs that can be handled easily, and inexpensively, by off-site experts. An HRO Firm can either specialize in a niche service, or in a wide range of management and strategic solutions. These broadly include:

Labor Law Consulting
Management Training and Employee Development
Employment Paperwork Administration
Employee Benefits Packages and Administration
Risk Management and Safety Services
Payroll and Tax Services
Insurance Solutions, including Workers Compensation and EPLI (Employee Practices Liability Insurance)

In a recent survey by the Society for Human Resource Management, or SHRM, professionals in the industry were asked their opinions on HR outsourcing. Reasons to consider outsourcing included saving money, focusing on strategy, improving compliance, improving accuracy, lacking experience in-house, taking advantage of technological advances, and offering services they could not offer.

In that same SHRM report, HR professionals said the top function outsourced was 401k administration, along with training, health care and employee benefits administration, payroll, staffing, background checks, recruitment and policy writing.

Once HR and other operations are outsourced, many companies experience a strong return on investment, according to a recent survey of American executives. The 2006 survey of executives at the IDC Midwest Conference in Chicago showed nearly 85 percent of the respondents saved as much as they spent on outsourcing, with 26.4 percent reporting a savings of twice as much. And the savings, according to nearly 95 percent of the respondents, went toward operational performance and innovation, which improved shareholder value.

According to IDC, a market intelligence firm based in Massachusetts, companies worldwide are expected to spend more than $103.3 billion just on Human Resource Outsourcing this year, up significantly from the $61.2 billion spent in 2002. In the U.S., HR Outsourcing is the fastest-growing segment of business process outsourcing (BPO) and is expected to grow annually at a rate of 16 percent.

The frustration brought on by the government's obtrusive standards can be offset by the value found in HR Outsourcing. As any business who has experienced the benefits of HR Outsourcing will say, they finally have the peace of mind and time to focus on the only thing in business that really matters: their bottom line.

About the author:

CPEhr is one of the oldest, privately-held HR Outsourcing and Employee Leasing firms in the United States. For the past 25 years, CPEhr has offered a comprehensive suite of HR Outsourcing services for small and mid-market business. With more than 13,000 serviced worksite employees in 24 states, CPEhr is one of the largest and most experienced providers of HR Outsourcing and Employee Leasing services on the West Coast. CPEhr is at the leading edge of the HR industry, providing some of the most innovative and flexible menu of employer services available on the market. To learn more about CPEhr and the value of HR Outsourcing, you can visit them at http://cpehr.com/ or, for Califonia businesses, learn more about the unique business challenges you face in the state at http://www.cpehr.com/HR-California-AWLP.php   

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