How to Select the Best HR Outsourcing Option for Your Business

More companies these days are choosing to outsource their human resources function.  With so many available options and variants (ASO, PEO, HRO), finding out which option is best can be daunting.

Choosing an HR Outsourcing Option Requires Careful Planning and Organized Execution
Outsourcing your HR function can often prove more cost-effective, efficient, and higher quality. Instead of handing HR responsibilities to someone on your team who already has a full-time job, give those responsibilities to a dedicated HR professional.  An HR outsourcing provider is also likely to continuously invest in the necessary resources to keep up with the latest developments in HR, compliance, and the law. 
An external HR provider can also make your Human Resources processes scalable.  Instead of having to rush to hire a new employee in HR every time a new need comes up, be it in payroll, healthcare, or hiring, an HR outsourcing provider often provides companies with a one-stop shop for all HR needs and issues.  But there are hundreds of HR outsourcing options out there, so how do you make sure that you are selecting the one that will work best for your business?
The simplest method is to develop a clear approach and stick to it. We’ve identified 5 simple steps to help you evaluate and chose the best HR outsourcing option for you:

Step 1:  Understand Your Drivers

First of all, we should really understand why we are even considering an HR outsourcing option.  Do we clearly understand what issues we are trying to solve? Is it simply a cost-reduction opportunity? Is it a compliance issue and needed to reduce risks? Or, is it simply that you want to Increase service levels and benefits to your employees?  Understanding these drivers well will help us better evaluate which HR outsourcing option offers the best solution. 

Step 2:  Understand Your HR Outsourcing Options

Once you understand why you are doing this, we need to understand the HR outsourcing options available out there.  Do we clearly understand the differences between a PEO (professional employer organization), an ASO (administrative services outsourcing), an HRO (human resources outsourcing), and or a simple payroll service provider?  More importantly, how do you evaluate each of these options’ strengths and weaknesses against your drivers? Here is a good overview of each of these HR outsourcing models.

Step 3: Develop Evaluation Process and Selection Criteria

Define a process for the selection of the best HR outsourcing option.  This process, just like any work plan, will define things like activities, timing, responsibilities, and deliverables. 
Once you have determined how you will go about selecting your HR outsourcing option, the next step is to carefully lay out the criteria that you will use to select a provider. Discuss this with every stakeholder. At most companies, this is every person who would interact with HR on a regular basis. Interview them to determine what characteristics and functions of an HR team are most essential to them. You can come away with a list of “Must Haves,” “Nice to Haves,” and “Not Importants.” Keep these selection criteria close at hand as you move along in the process so that you don’t lose sight of what your company actually needs.

Step 4: Execute Plan

Now, it is time to run the evaluation process that will take you through the identification, selection, and evaluation of a number of potential HR outsourcing options and vendors against your selection criteria.
Supporting the execution of this plan with a task management and accountability tool like CommandHound will help make sure things get done, on time, as expected, and that nothing falls through the cracks.  In addition to supporting the project management aspects of an initiative like this, a tool like CommandHound have the added benefit of instilling a strong sense of accountability in a team by tracking team members’ individual performance throughout the process.
 

Make Sure That All Stakeholders Have a Say in the HR Outsourcing Process
In CommandHound you can create task groupings, or Control Towers, for each major section of your plan or process, like “Research Providers and Select Top Options,” and then create a reusable Control Tower, or Template, with your evaluation criteria so you can run a standard evaluation for each HR outsourcing provider in your short list. 

Each Control Tower contains specific tasks, or Control Points, that can be assigned to team members for completion. CommandHound will then monitor, remind, escalate if necessary, and track completion performance at the individual level, hence accountability, while keeping its dashboard constantly updated with the overall status of things.
CommandHound Will Keep Your HR Outsourcing Selection Process Organized and On-Time

Step 5: Select Your HR Outsourcing Option

Once you have executed on your plan, you will finally have all of the information you need to select the best provider for your HR outsourcing needs. Select your provider, and then celebrate the successful execution of an organized plan by your team!
To learn more about how to stay focused, organized, and on-time with choosing a Human Resources outsourcing option, click this button and further explore CommandHound: