Beyond the business plan and official paperwork, most businesses will eventually need to hire employees and manage payroll and benefits. Growth in your business is certainly a good thing; however, managing employees and payroll also means another aspect of your business that needs an abundance of time.
Human Resources, most commonly referred to as just HR, could simply be defined as a department that manages the resources for the humans of any business. The purpose of the HR department is to handle the hiring, training, administration, and sometimes firing of employees for a business/organization.
Most major companies have a dedicated Human Resources department and a full-time HR manager because of the time needed to ensure that the employees are properly taken care of and the company remains compliant with federal and state regulations.
All companies, regardless of size, need help in managing employee benefits and payroll. The solution for small business owners may be eschewing the in-house HR department for a virtual one.
What Does HR Do?
There are five main functions that a Human Resources department performs for the business:
- Supervise staffing
- Handle compensation
- Manage benefits
- Oversee performance reviews
- Ensure compliance to laws and regulations
While the two most popular and notable “jobs” of Human Resources are hiring and paying employees, this department is also responsible for shepherding all aspects of offered benefits and performance reviews. HR is also accountable for keeping the business in good standing with federal state laws and regulations.
Ye Olde HR Ways
At one time, the tasks overseen by Human Resources translated to more than just time — hiring and supporting a business’s employees translated to a sizeable quantity of paperwork. From the application to the W-4 and I-9 to direct deposit authorizations and the employee handbook, all that paper had to be checked, filed, and watched over since each folder contained highly sensitive information.
In addition to the extra paperwork, the “old” way of running an HR department also included extra on-site manpower. Multiple people were responsible for covering a specific area of the whole department (i.e. payroll, benefits, training, etc).
The New Deal
Once upon a time, the idea of conducting business entirely on the internet seemed more like science fiction than a possible reality. However, in just over three decades, the world has shifted from the traditional way of doing business (a physical property) to an entirely online economy and marketplace. Why shouldn’t other business functions also follow a non-traditional path?
Outsourcing Human Resources functions to companies like ADP has become quite common, especially for small businesses. Think of it in the same light as hiring IT contractors or remote web designers — the job still gets done without taking up office space and requiring your new business to hire a whole department.
The virtual HR department has eliminated the need for so much paperwork, streamlined the hiring/onboarding process, and better secured personal and sensitive information.
Online HR: Virtually and Hugely Resourceful
The role of the outsourced HR company is to make running a business easier for the business by covering hiring procedures, payroll, taxes, and even benefit management.
What do virtual HR companies cover for small businesses?
- Resourceful customer support
- Online payroll access for employees
- Payroll managing and tracking for the business
- Freedom from paperwork - everything is handled through the website
- Tax filing ability
Given the limited resources of many newer small businesses, online HR firms may be a cost-effective option that still offers an abundance of benefits.
The In-House Edge
Even though a virtual HR department offers a number of benefits, there are still a few disadvantages to moving Human Resources completely off-site.
- Loss of Human Interaction — even with a knowledgeable customer support staff, handling personal issues with a voice over the phone is not the same as face-to-face communication and can affect the morale of the employees.
- Loss of Control — an outsourced HR department can mean savings for the business, but it also means that you have less control over your employees’ payroll and benefits if the outsourced company is negatively impacted in any way (i.e. software glitch, website crash).
- Loss of Personal Expertise — For the online HR company, each business under its watch is another client among many. The work may be efficient, but there is a lack of personal understanding of any individual business and its employees. Virtual HR firms may also be less knowledgeable of specifics concerning a business that only someone involved on a daily basis could comprehend.
One idea for small businesses to bridge the personal gap is to hire a representative/manager to oversee any HR-related issues that occur in the office. The business can still take advantage of the resources of the virtual human resources company.
Do What’s Best
Every business’s needs are different and the best option for any small business owner is to find the level and type of HR help that will be beneficial to the company. Virtual HR firms, even with the few concerns, is still a good option for any company wanting to simplify some of its business practices.
Of the many HR companies to choose from, ADP is a leader in the industry of human resources management. As an added bonus, ADP is offering a special deal specifically for Swyft Filings customers: First 3 months free or 20% off your first year.