- September 3, 2018
- Posted by: Marketing Member
- Category: Blog

Over the past few years, Human Resources Outsourcing has grown as an accepted business practice by a broad range of business markets and industries. Even with the slow moving economy, the HR Outsourcing industry continues to boom as employers look for ways to improve efficiencies, cut overhead and consolidate vendors.
Businesses that are currently investigating Human Resources Outsourcing firms should take the following factors into consideration. As an outsourcing relationship can continue for many years, choosing the right firm should be given a great deal of time and research.
Consider the following five criteria when selecting an HR outsourcing firm:
Financial Stability
Many HR firms manage the fiduciary obligations of their clients. These employment responsibilities include processing payroll, submitting payroll taxes and paying insurance premiums. Firms should be in business for at least ten years, have strong financial credentials, long-term banking relationships, and can verify taxes and insurance premiums have all been paid.
Proven Service Track Record
While solid financial references may prove stability, they do not necessarily equate to good employment practices or superior customer service. Prospects should check the HR credentials of the staff, including a team consisting of licensed human resource experts, at least three client references, and verification that they have a successful track record in all areas of regulatory compliance, benefits and safety.
Niche vs. Diverse Client Base
Depending on the industry of the business, in some circumstances it may be more beneficial to work with a ‘niche’ human resources outsourcing firm. Some HR companies develop an expertise in a particular market – hi-tech, transportation, construction, or the entertainment industry, for example – and it may in a business’s best interest to work with specialty HR outsourcing company. On the one hand, it may behoove the business to work with a firm that has a diverse client base. The benefit of working with a broader, ‘non-niche’ HR firm is that this diversification can help protect clients against economic fluctuations or insurance instabilities. Were one industry to crash, it would have minimal impact on other industries. Diversification also dilutes insurance and employment risks over a broader base. This diversity can be reflected in geography, industry, or size of employee base.
Local Market Presence
Many employment laws and tax guidelines vary from the state to state, and differ from the federal laws. It is highly recommended to work with an employment firm that is experienced in the state in which the business is located. A local HR vendor will be well versed in the nuances of the law.
Flexibility in Service Offering
Finally, many HR outsourcing firms take a service approach that can be best described as “one size fits all”. They typically require their clients to purchase all offered services as a package deal. This can include everything from insurance products and payroll processing, to recruiting, handbooks and training. Clients will pay an all-inclusive fee whether they take advantage of all the services, or not. While some businesses may indeed require the full spectrum of offered services, many will not. It is advisable to assess which areas of employment compliance require help, and which do not. Select a vendor that is flexible and offers customization to their HR service offering to match your company’s precise needs.
For employers in the market of human resources outsourcing, these five pointers are an excellent starting point in finding the perfect HR outsourcing relationship.