Leveling the Playing Field: How HRO Can Help Small Businesses Thrive in a Big Business World

Small businesses often find themselves facing a challenging David-and-Goliath scenario, particularly when it comes to attracting and retaining talent. According to a 2022 survey from Goldman Sachs, 42% of small business owners have lost workers to a larger company that offers better pay. This statistic underscores the critical role that human resource outsourcing (HRO) can play in leveling the playing field and helping small businesses compete in the labor market.

HRO providers offer two powerful drivers that can boost employee engagement and improve overall business performance. Here’s how.

Driver 1: A Professional HR Team

The first driver that an HRO firm provides is having access to a dedicated, expert HR team. As a small business owner, you likely find yourself multitasking, from managing payroll to handling employee onboarding. However, outsourcing these tasks to a professional team can often be a more cost-effective solution, freeing up your time and energy to focus on your core business operations.

Having a professional team on your side offers several advantages over a single internal employee (or yourself as the business owner) in handling “all things HR.”  First, you remove the “single point of failure” risk, should you or the employee responsible for administrative HR suddenly get a serious illness, have a serious accident, suddenly quit or some other unforeseen issue arise. An HR Outsourcing partner brings multiple layers of redundancy that a small business simply cannot afford. Second, a professional team brings a wide body of knowledge, expertise and industry best practices to the table that is difficult to match with just one employee. Third, outsourcing to a professional HR firm brings a higher degree of accountability to the overall process, as they have contracted Standards of Performance outlined in their agreement. It’s unlikely that internal employees would be held to such levels of accountability and standards.

An HRO provider grants small businesses access to five types of HR professionals:

HR Manager

A dedicated HR manager can help you coordinate your administrative functions and keep your workers productive and engaged. They can also assist with your recruiting and onboarding process and conduct all their duties while ensuring your business complies with industry and government regulations.

Payroll Specialist

A payroll specialist will assist with the administration of employee compensation and benefits. Employees will be happier when their paychecks are processed smoothly and reliably, as they’ll feel confident that their pay and benefits are being handled professionally and efficiently.

Workers’ Compensation Manager

A workers’ compensation manager will oversee and administer your organization’s workers’ compensation program. They will ensure compliance with state and federal regulations, manage claims and associated costs, and coordinate with insurance carriers and healthcare providers. Additionally, they implement safety and loss prevention programs to reduce workplace accidents and injuries, and provide education and training to employees and managers on workers’ compensation policies and procedures. 

Benefits Administrator

A benefits administrator is responsible for managing and administering the employee benefits programs within your organization. They will handle employee enrollments, terminations, and changes to benefits plans, ensuring compliance with state and federal regulations and company policies. Benefit administrators also work with insurance carriers and brokers to negotiate and select benefits plans that suit your needs and budget. They educate employees about available benefits options and serve as the main point of contact for employee questions and concerns related to benefits.

401k Administrator 

A 401k administrator is responsible for managing and maintaining an organization’s 401k retirement plan. They work with plan providers, record keepers, and third-party administrators to ensure the plan operates in compliance with ERISA regulations and company policies. The 401k administrator is responsible for processing employee contributions and investment allocations, as well as managing distributions, rollovers, and loans. They also handle Plan communication and education, ensuring employees understand their investment options and retirement planning strategies. 

Driver 2: Access to an HR Portal

The second driver is an online HR portal that allows employees to manage themselves. HR Software gives both employers and employees insight into their productivity, their available benefits, and the company’s overall operations.

What can you expect from an HR portal?

Streamlined HR Processes

Your small business will be able to automate so many HR processes, such as:

  • Payroll
  • Benefits administration and enrollment
  • Time and attendance tracking
  • Hiring and recruiting 
  • Onboarding
  • Performance Management

This saves you time and minimizes the risk of error caused by manual data entry.

Increased Compliance

Today’s businesses must remain compliant with labor and tax laws. HR software automates compliance tasks, including:

  • Tax filing
  • ACA reporting
  • COBRA administration

Given the steep fines for violating these standards (COBRA alone charges $100 per tax day for noncompliance), HR software can potentially save your business thousands.

Improved Employee Experience

Polls have shown that engaged workers are 14% more productive. One way to increase engagement is to use an online HR portal to allow employees to manage their own HR tasks. Workers can use the portal to perform such tasks as:

  • Request time off
  • Update tax and direct deposit information
  • Enroll in benefits
  • Access pay stubs and W2s

Such a system is actually vital for today’s hybrid/work-from-home culture, where workers need a cloud-based portal to manage their files.

Access to a Wide Range of Benefits

Employees expect basic healthcare and dental insurance. But many workers are also looking for additional options for supplemental insurance, retirement plans, and more. 

By partnering with a variety of benefits providers, HRO providers can offer your employees more flexibility when it comes to benefits packages, and the HR Platform itself can help employees manage these benefits through their own online self-service portal.

Customizable Reporting

Even small businesses deserve access to the best data. HR software provides customizable reporting tools that allow small business owners to track key HR metrics and make data-driven decisions. You can use this data to create and track your KPIs or generate reports to share with lenders or stakeholders.

The Power of Combined Forces

By leveraging the two key drivers offered by HRO providers – a dedicated HR team and an intuitive online portal – small businesses can enhance their ability to compete and thrive in a corporate landscape dominated by larger organizations. Whether you’re looking to streamline HR processes or provide your employees with a more engaging and user-friendly experience, partnering with an HRO firm can empower your small business and help you stay ahead of the curve.

For instance, a payroll specialist can take payroll administration completely off your plate. But if your employees have questions, they can access their HR portal to manage their information and review their benefits.

Similarly, the portal will vastly improve your ability to meet compliance standards and industry requirements. But the automated compliance features are further augmented by a dedicated HR manager. A professional team can stay current with evolving standards, helping you maintain compliance and avoid any penalties or fines.

Perhaps most importantly, HRO providers relieve you or your workers from administrative burdens that distract you from your true priorities. Now that your HR needs are managed through a firm, you’ll have more time to devote to growing your core business. And isn’t that what you’re truly passionate about?

Make Time for a Free Consultation

Focus HR can provide HRO services to keep your workers happy and engaged, and HR software that will make your small business operate with the efficiency of a major corporation. When you’re ready to see for yourself, contact Focus HR to request a free consultation.

Scroll to Top