Benefits & Advantages of Outsourcing HR

Employees Demand Good Benefits

Today’s business environment emphasizes the importance of having quality health and retirement plans to attract and keep good people. This is one of the critical concerns of business employers of any size company. But, creating and administering such plans can be incredibly time consuming and complex.

ProSourceSolutions has the resources to provide a comprehensive benefits package for your company, and the experience and economies of scale to administrate it both efficiently and affordably.

Advantages of Outsourcing HR

Understanding and administering your employees group health plan is a complex, detailed, record keeping and time consuming operation. We can administrate the entire range of health insurance offerings from numerous providers and manage your 401K plans efficiently and challenge free.

Our Multiple Employer 401(k) Plan allows for customization of employee eligibility requirements, matching and profit-sharing contributions by an employer.

Allowing PSS to administrate your company benefits enables us to communicate with the employees regarding coverage and meet their benefits needs.

Explaining the Co-Employer Process

The PEO relationship involves a contractual allocation and sharing of employer responsibilities between the PEO and the client; this shared employment relationship is called co-employment.

When evaluating the employer role of either the PEO or the client, the facts and circumstances of each employer obligation should be examined separately, since neither party alone is responsible for performing all of the obligations of employment.

Each party will be solely responsible for certain obligations of employment, while both parties will share responsibility for other obligations.

When the facts and circumstances of a PEO arrangement are examined appropriately, both the PEO and the client will be found to be an employer for some purposes, but neither party will be found to be "the" employer for all purposes.

Sharing the Employee Relationship

Both the PEO and the client company establish common law employment relationships with worksite employees. Each entity has a right to independently decide whether to hire or discharge an employee. Each entity has a right to direct and control worksite employees — the PEO directs and controls worksite employees in matters involving human resource management and compliance with employment laws, and the client company directs and controls worksite employees in manufacturing, production, and delivery of its products and services.

The client company provides worksite employees with the tools, instrumentalities, and place of work. A PEO can assist in ensuring that worksite employees are provided with a worksite that is safe, conducive to productivity, and operated in compliance with employment laws and regulations. In addition, the PEO provides worksite employees with workers' compensation insurance, unemployment insurance and a broad range of employee benefits programs.

The PEO-Employee Relationship

PEOs create an employment relationship with their workers. This relationship exists in fact, not just in form. PEOs can manage the risks attendant to the personnel functions that they perform only if they establish an employment relationship with their worksite employees.

Unless a PEO has a right to direct and control worksite employees, as well as a right to hire, supervise, discipline, and discharge these employees, the PEO will merely assume liability without having a means to manage that liability.

PEOs manage their employment liability exposure by monitoring and requiring compliance with employment laws, developing policies and procedures that apply to worksite employees, supervising and disciplining worksite employees, exercising discretion related to hiring new employees, and ultimately terminating worksite employees who do not comply with requirements established by the PEO.

A Cost-Effective Alternative

When businesses don’t have the time or resources for handling the HR function, outsourcing is a cost-effective alternative. Outsourcing to ProSourceSolutions can save money by eliminating the need to hire specific talent not already secured within the company. Outsourcing HR to ProSourceSolutions can also increase productivity allowing HR time to focus on core business activities and be more strategic within the company. Outsourcing to ProSourceSolutions can also improve basic service by providing resources to handle employee needs, increasing accuracy and meeting compliance standards.

Important Considerations

Once you determine you have a need, whether it is the lack of internal resources or time commitment, first determine if outsourcing is a good fit for your company.

Considerations include:

Will your company culture will allow for outsourcing to ProSourceSolutions?

A company culture could limit outsourcing possibilities if, for example, letting ProSourceSolutions handle HR functions could clash with company values.

When evaluating company culture and financial resources, what HR functions can be easily outsourced to ProSourceSolutions?

These might include payroll, benefits, training and risk management.

The ProSourceSolutions team can help you evaluate the various factors to determine if outsourcing makes good sense for your company.

Benefits Outsourcing

It is possible to outsource benefits administration as a single function to ProSourceSolutions without limiting your organization’s ability to make other HR outsourcing decisions. Benefit administration is both complex and time consuming. HR personnel are able to concentrate on their core competencies and ProSourceSolutions manages the new employee sign-up, annual benefit enrollment and communication with the employees.

Additional Functions to Outsource

There are still some additional functions that would seem to integrate nicely with benefits administration. One obvious integration candidate would be payroll administration, given that many benefit programs require employee contributions, premium deductions or some other type of interface between payroll and benefits. These operations are handled on a daily basis by our staff as well as keeping the employees informed of their status.

Another long-term candidate would be compensation administration, because employee benefits are really just another form of compensation, we are able to communicate the value of total compensation to the employees.

Finally, executive compensation is often tightly linked with benefit plan administration either in the form of the nonqualified component of the retirement programs or in the form of other deferred compensation arrangements that are designed to mimic defined contribution plans. So, again from a communications vantage point, the integration of benefits and compensation administration by ProSourceSolutions clearly displays the advantages of outsourcing your HR functions.

Beneficial Outsourcing

Other examples beneficial outsourcing of HR to ProSourceSolutions include:

  • Integrated financial advice servicesas part of 401(k) plan administration.
  • Medical plan optionsas part of the annual enrollment process.
  • Integrated retirement statementsfor participants, communicating the value of participation in both the defined benefit and the defined contribution plans.
  • Debit card purchasesin conjunction with FSA accounts.