HR outsourcing, PEO

HR outsourcing: How to keep your HR staff from freaking out

You’ve decided that HR outsourcing can help your business grow, and you’re ready to hire a professional employer organization (PEO). But your HR staff – or person – isn’t thrilled. Here’s what could be causing that, and how you can turn it into enthusiasm.

What’s behind the resistance to HR outsourcing?

One word: fear. What’s likely running through your HR manager’s mind:

  • Are they looking to reduce headcount?
  • How does this affect my job?
  • Am I going to be let go?
  • Do they think I can’t do my job?

It’s natural for them to feel that way initially. They don’t want to give their duties over to an HR provider because they feel threatened. This is where your company’s leadership should come in to help them through this change.

Change management

There is a rational and emotional response to change. Working on both is important for your HR staff. Acknowledge the fear and emotion, and deal with it. Help them understand why you’re making a change and how you expect it to affect them. Trying to dismiss concerns can lead to distrust and performance issues.

Paint your vision for the future. Describe what it will look like for the whole company and for each individual on your HR team as your company progresses with HR outsourcing.

You might say something like, “Picture yourself doing more strategic work while you have a team of professionals on your side handling the daily tasks and advising you on more complex issues.” How do you think your HR people would respond to this scenario?

With vision comes buy-in

Then, when that picture is firmly set in their minds and you get buy-in on the vision, talk about the journey and how you’re going to make the vision a reality. Lack of clarity and uncertainty about the future is the main reason for both explicit and quiet resistance. Be confident and specific – your positive outlook and tone will help your workforce embrace the change with confidence and enthusiasm.

Give everyone multiple opportunities to ask questions about HR outsourcing, either publicly or face to face with management. Focus on communication and transparency of the process – and ensure your HR staff that this move is happening to empower them, not compete with or replace them.

But, don’t try to sugarcoat everything, either. Acknowledge that the transition process may be clunky and uncomfortable at first, but that it is necessary to pave the way toward better, more efficient ways of doing things.

A reputable PEO should have a robust, comprehensive process to help take you and your team through the transition, making it as seamless as possible for the entire organization.

Why hiring a PEO is a good thing for your HR staff

Very likely, your human resources personnel didn’t go into HR for the paperwork. They’re probably well-educated with degrees or certifications – and an undeniable passion for helping your organization and your people succeed. A PEO can walk alongside your existing HR department to allow it to go beyond the daily HR administrative tasks that often take up a great deal of time.

Suddenly, payroll, benefit plans, recruiting support, performance management and certain employer liability issues are no longer time-sapping tasks. That’s why it’s important to find a professional employer organization worth its salt that will handle these administrative tasks for you without missing a beat.

Now, with the support of HR outsourcing, your HR team can spend more time on initiatives that support the business’s goals. They can be strategic in their efforts, not just simply reacting to whatever paperwork is coming down the pike. They’re freed up to focus on things like training, leadership development, company culture and employee engagement – or other priorities that deserve their attention.

Let’s say, for example, your HR manager now has the time to conduct an employee survey. It finds that a certain department’s mission isn’t aligned with your company’s. Your HR manager can develop an action plan for that group. The outcome of increased alignment and engagement makes that department more valuable to the company.

And, greater engagement usually leads to increased retention. With more bandwidth to concentrate on strategic initiatives like this, your HR manager will be better positioned to help bring quantifiable results to the company.

Stronger with support

In addition to handling daily HR administration, with a PEO your HR staff doesn’t have to deal with complicated, messy issues alone. A PEO should have a team of professionals to help navigate the complexities of employment issues, which include such things as HR-related government compliance, unemployment, payroll taxes, hiring and firing, and workers’ compensation.

A reputable PEO should also be able to scale its available features and services when your business needs evolve. This can help ensure that your HR team has the resources and support it needs to work more efficiently at any stage.

For example, if you’ve only got five employees, you may not currently be in a position to offer a retirement savings plan. But, what if your business volume increases and you find yourself needing to double or triple your company’s workforce in the next couple of years? Adding a 401(k) option to your benefits package gives your HR staff more resources to attract and retain talent.

If you choose a PEO with scalable offerings, they’ll be able to adapt as your needs change over time.

Everyone benefits

When a PEO enters the picture, more than just the HR staff will be affected. The benefits – literally – will be felt throughout the entire workforce, including HR and management. If you’re fortunate enough to work with a premium HR provider, you and your employees should have access to better benefits than you’d be able to offer on your own, such as a 401(k) plan, health care benefits, employee assistance program and education reimbursement.

Garner enthusiasm for the move to HR outsourcing by educating everyone company-wide about how working with a PEO will benefit them directly. When people understand what’s in it for them, they’re usually quicker to get on board with a new initiative or concept. Present the benefits in a way that’s relevant to your employees. Let them know things like:

  • “You’ll have a variety of health insurance policies to choose from, instead of just one.”
  • “You’ll have the option to save for retirement with a competitive 401(k) plan.”

These are the kinds of benefits that can improve the quality of life for your employees. And, when the employees are happy, the HR staff is happier, too.

 Where to find some answers

If you’re considering a professional employer organization, know that not all are created equal. Make sure you’re getting the best PEO for your needs; one that has a solution for where you are now – and where you want to grow.

Find out how to get the right PEO for your business in our guide, A buyer’s checklist: How to compare professional employer organizations.