How to Outsource Human Resource Management

June 16, 2014/0 Comments/in How to Outsource Human Resources /by Mike Smith

How to Outsource Human Resource Management

These 6 steps are designed to help companies decide if it would be cost-effective to outsource human resource management, and if so, how to do so.

Step 1:

Map out the current human resource management functions. List all the functions that the HR department provides, from employee recruitment to exit.

Ex. Recruitment & Selection, orientation, performance management, compensation and benefits, training, career development, succession planning, exits.

Step 2:

Identify areas of the human resource management operations that need to be implemented or improved. This will aid in deciding if the company should outsource human resource management, and help locate the right fit for the company’s needs.

Step 3:

Calculate the cost of the HR department. Also, keep the opportunity cost in mind. What is the core business of the company? Compare the amount of time and effort the company spends on income producing activities to the amount of time spent on human resource management. Compare the cost of the HR department to the cost of an HR outsourcing service. Remember that hiring an HR outsourcing service does not necessarily mean firing the current HR staff. Many HR outsourcing services can accommodate by hiring the current staff to implement and maintain the new HR outsourcing service. Or, many employers choose to re-direct HR employees to other income producing functions of the business, such as billing.

Step 4:

Learn about the available service options for the company’s needs. HR outsourcing comes in many forms. Some clients benefit the most by entering into a co-employment relationship with a human resource provider, such as with a PEO (Professional Employer Organization). Other clients benefit the most by utilizing an HRO (Human Resource Outsourcing) service.

Tip: If the PEO has better state unemployment rates, and also has better workers compensation rates, they will probably be a more cost-effective option. If the company looking to outsource HR currently has great SUTA and WC rates, then an HRO will probably be a better solution.

Step 5:

Find an expert representative or broker for an HR outsourcing service. Look for a broker that understands the specialized HR functions that are particular to the clients industry. The broker should possess analytical competence, and be able to identify cost-effective solutions for the client. If the broker has a number of successful implementations and client testimonials, this will be a favorable indicator of the broker’s competence.

Step 6:

Purchase and Implement. The new human resource management provider will help implement the outsourcing service. This will include timelines, resource allocation, communication, etc. A good service provider will provide a seamless transition that is cost-effective for clients.

If you would like a specialist to help outsource your human resource management, call 214.952.8696, or email mike@eagleemployerservices.com.

For more information regarding how human resource outsourcing services are able provide the same (Or better) services while saving clients’ money, read: http://eagleemployerservices.com/peo-model/.

Outsource Human Resource management | Eagle Employer Services

How to Purchase Workers Compensation Insurance

June 5, 2014/0 Comments/in How to Purchase Workers Compensation Insurance /by Mike Smith

How to Purchase Workers Compensation Insurance

Below are 7 simple steps regarding how to purchase workers compensation insurance. These steps will help business applicants get inside of the mind of an underwriter. Knowing why each step is needed will help applicants complete a submission in a way that is most likely to get their workers compensation application approved.

Step 1:

Write a detailed narrative of your company. Include information about products and/or services, your business location, mission statement, etc. A detailed description of the work you do will help the underwriter to assign the proper workers compensation classification code. If the underwriter is unsure about any workforce procedures, it is their job to automatically assume the higher risk class code. So, the more information the better! A website is a great resource to supplement your company narrative. However, before you complete any submissions, be sure your website reflects the same description that is being submitted in the narrative. Any contradictions between the written narrative and the company website can quickly result in a denied submission.

Step 2:

Write a detailed narrative of safety procedures. Here you will want to emphasize any safety procedures that you have in place, and how they have positively influenced the safety of your workforce and corporate culture. This is because a carrier will be more likely to accept your submission if they believe you have a safe workforce environment.

Step 3:

Obtain resumes for the key people in your business (This might only be you, the owner). You will want to put your best foot forward, and elaborate on your expertise in the same industry of which you are applying for a workers compensation policy. This is because experience and expertise in an industry is typically correlated with safety. For instance, it will be a red flag to an underwriter if an accountant is applying for a roofing work comp policy. If this is the case, the accountant must provide a resume for a key person who will be in charge of the roofing aspect of business.

Step 4:

Obtain a loss run detail report from your current workers compensation carrier. The underwriter will require 3-4 years of history. If you have not been business for that period of time, you will need to show evidence of when you started in business (Such as an LLC filing). If you have been operating for a period of time without a work comp policy, you will need to state that. In this scenario, you will need to provide a “No-loss” statement on your company letter head, which states you have not had any losses for that timeframe. If you have had losses, you will need to specifically list them and the status of those claims. This is because the insurance carrier does not want to be liable for injuries that happened prior to you becoming their customer.

Step 5:

Get a copy of your last 2 or 3 quarterly 941 reports. When you get to the application process, they will want an estimated amount of payroll your company will be running. This report will help prove the accuracy of your estimation. By including items such as these that are not always required by an agent, you will be gaining the respect and trust of the underwriter.

Step 6:

If you have a favorable financial condition, provide documentation of your resources. This is because many business who cut corners on costs will also cut corners on safety. A strong financial condition is one more reason to convince an underwriter that you are a worthy applicant.

Step 7:

From here, the agent or broker has everything they need to complete your workers compensation submission. But, you will first want to find and insurance broker that specializes in your industry. This is because insurance companies always assume the worst with the unknown, especially when insuring risks they are unfamiliar with. Specialists utilize the law of large numbers, and are more capable of getting your company approved by evenly distributing the risk among a larger group of insured in your industry. You can find one by searching online, or by recommendations of those who you respect in your own industry. Look for a broker who wants to write your business, and wants to work for you. If the broker acts like your business is too small, or too complicated, then find another one. If they have that attitude during the underwriting processes, it certainly won’t improve after you are a customer. Look for a broker that sincerely cares for you and your business, and that you would like to work with. These brokers will be your best chance of getting approved for a workers compensation policy at the best possible rate, with the best possible service.

If you would like assistance in completing a workers compensation application, please contact us and we would be glad to help.

Purchase Workers Compensation Insurance | By Mike Smith

The Growing Burden of Employment

May 9, 2014/0 Comments/in The Growing Burden of Employment /by Mike Smith

In the last few decades, the growing burden of employment has been the driving force behind the growth of the employee leasing industry. Local, state and federal governments have created an incredible burden of employment and employee benefits regulations. Employee leasing solves this problem by shouldering much of the routine personnel work, payroll, and benefits administration. By outsourcing, businesses are enabled to decrease administrative burden and expense, while redirecting focus towards the product or service of their core business. Benefits include:

Relief from payroll and tax administration.
Simplified and streamlined workers compensation management.
A wide range of HR management solutions through a team of professionals.
Access to a comprehensive employee benefits packages.
Assistance to improve productivity and profitability.

The Growing Burden of Employment

The Growing Burden of Employment | By Mike Smith

All Employment is a Form of Leasing

May 8, 2014/0 Comments/in All Employment is a Form of Leasing /by Mike Smith

All Employment is a Form of Leasing

Some employers are hesitant to embrace the concept of “employee leasing”, but why? Keep in mind that all employment is a form of leasing. An employment relationship is a “renting” or “leasing” agreement between an employer and an employee. In fact, the modern concept of employee leasing has a long legal history originating back to the “borrowed-servant doctrine”. Note the similarities below:

Single Employment

Employee agrees to exchange labor for wage
Employer is responsible for human resource management
Employer provides workers compensation
Employer provides employee benefits
Responsible for payroll & tax administration
Employment provided by the core business

Employee Leasing

Employee agrees to exchange labor for wage
Employer is responsible for human resource management
Employer provides workers compensation
Employer provides employee benefits
Responsible for payroll & tax administration
Employment is outsourced to a PEO

If you would like to learn about the differences between the traditional concept of employment, compared to employee leasing, read single employment vs. co-employment.

All Employment is a Form of Leasing | by Mike Smith

Single Employment Vs. Co-employment

May 8, 2014/0 Comments/in Single Employment vs. Co-employment /by Mike Smith

Single Employment vs. Co-employment

The key difference between single employment and co-employment is outsourcing. Single employment is exactly what is sounds like; it is the status of an employer who has the sole legal rights and responsibilities of employment with regards to their workforce. Co-employment exists when the legal rights and responsibilities of employment have been divided and outsourced. In the co-employment scenario, there are two employers with actual or potential legal rights and obligations with respect to the same employee or group of employees.

Single Employment

One employer retains all employer responsibilities
Employed and paid the direct provider of product or service
The sole employer administers wages and benefits
Hours worked and wages are collected and paid by the sole employer
The sole employer deals directly with work comp carrier regarding risk management, premium calculations and deposits, claim investigations, loss control, premium audits, etc.

Co-Employment

Two legally separate employers share some, or all, of the employer responsibilities with the same employees
Employed by the staff leasing company, but working for the direct provider of product or service
The staff leasing company administers wages and benefits
Hours worked and wages to be paid and directed by the sole employer, but administered by the staff leasing service.
The staff leasing company deals directly with the work comp carrier regarding risk management and the correlating responsibilities and liabilities.

Single Employment vs. Co-Employment | Eagle Employer Services

What is employee leasing?

May 8, 2014/0 Comments/in What is Employee Leasing? /by Mike Smith

What is employee leasing?

Question: What is employee leasing?

Answer: The term “Employee Leasing” refers to an employment outsourcing arrangement where many of the employer related responsibilities and liabilities are outsourced to a specialist. This fundamentally means that one company manages the HR responsibilities, while the other manages the product or service.

Employee leasing has been around for a long time, but many employers still need clarity regarding “what is employee leasing?” Employee leasing is an outsourcing service that enables clients to cost-effectively delegate the management of human resources, payroll administration, employee benefits and workers’ compensation. Clients can typically reduce their cost of revenue, while also re-directing time and energy towards the operational and revenue-producing side of its operations. Some key points of the employee leasing arrangement include:

Two legally separate employers who share some or all of the employer responsibilities with the same employees.
Leased employed are employed by the staff leasing provider, which pays their wages and benefits, but whose employees report to (and work for) the client company.
Client companies write a check to the leasing company to cover payroll, taxes, benefits, and administrative fees, typically for less than if they did it themselves.
The employee leasing company manages compliance with state and federal regulations, payroll, unemployment insurance, W-2 forms, claims processing, etc.

If this is your first introduction to the concept of employee leasing, it probably won’t be your last! There is a growing burden of employment, and our industry is growing right alongside of it! Take a look at some of our other articles to see if the employee leasing solution is right for you.

What is Employee Leasing? | By Mike Smith