HR Tasks You Didn’t Do Today Can Cost You Big Tomorrow
May 5, 2011
Contributed by CRT Sponsor Kathryn Justyn, Insperity
Business owners are on call 24 hours a day, 365 days a year. In order to fit it all in, you’re forced to prioritize and cut the fat off your to-do list. And unfortunately, human resource responsibilities usually take a backseat to more pressing matters.
Putting off or having a lack luster HR function can become so habitual that you don’t even notice when it’s happening or how it’s affecting your business. While it may not directly affect the performance of your business today, over time HR neglect can stunt your company’s effectiveness, growth and profits dramatically.
To gain a better perspective on what you’re missing, consider what HR issues Sally, a budding business owner, is struggling with at her company. Sally owns a small furniture wholesaler and like most small businesses a high functioning HR Department doesn’t exist. Everything from hiring new employees, processing payroll to conducting performance reviews falls on her or her office manager’s shoulders. Never mind having any kind of strategy to align her people with her mission, vision and values. Here are Sally’s latest human resource issues:
1.Shopping medical insurance. Sally ‘s healthcare premiums are astronomical and continue to sky rocket annually, really cutting into her profits. She’s had to ‘cannibalize’ her existing plans, to offset the huge increases. Higher co-pays, coverage reductions, etc…. have really affected her people. Not to mention she could use more working capital to grow her business.
2. Hiring new sales people. Sally needs more sales staff, but there is no real process in place, nor are there job descriptions. It’s been awhile since she’s recruited someone and doesn’t know what the market will bear as far as compensation. She just doesn’t have the time to interview.
3. Learn about wrongful termination regulations. Roger, a tenured warehouse worker, has been troublesome for the past nine months. He has been counseled but is showing no signs of improvement. She wonders should he be terminated or is he salvageable? What are the costs of turn-over and ultimately how will it affect her business. What are the legalities around termination? Who can she talk with?
4. A 401(k). Mary from sales is interested in a 401(k), but none exists. Sally hasn’t had much time to look into setting up a retirement plan, much less learn about what would be best for her and the employees. Mary is getting frustrated and is complaining to co-workers. Other staff members are starting to talk and productivity has dropped.
5. Revise the employee handbook. It has been three years since the employee handbook was created from a sample taken off the web. What should be in the handbook? What laws have changed? Because she has remote sales people, what are the state laws that apply?
While Sally is happy that her business is booming, she is overwhelmed by the additional work and responsibility. Her focus on the increased business has caused her to forego what is needed on the HR side of her business. These HR issues remain untouched or incomplete, day after day, week after week until she finally realizes that this exposure could add significant costs to her business.
What are the alternatives? She could hire a human resources professional, but will they be they be an expert in all HR disciplines and in all states? Does this talent warrant a significant addition to payroll overhead? What happens if that person is not a fit or if they leave? A better alternative could be a Professional Employer Organization (PEO). A PEO handles the human resources function of client’s businesses on an outsourced basis. For many business owners, contracting with a PEO is a scalable, efficient and cost effective way of administering and managing HR, maintaining compliance, and best practices. A PEO not only handles the tactical aspects of HR, but also provides an ongoing strategic solution. Using a PEO lets the business owner keep focused on profitable revenue generation and not on the business of being an employer.
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Insperity, a trusted advisor to America’s best businesses for more than 25 years, provides an array of human resource and business solutions designed to help improve business performance. Insperity Business Performance Advisors offer the most comprehensive Workforce Optimization solution in the marketplace that delivers administrative relief, big company benefits, reduced liabilities and a systematic way to improve productivity. Additional offerings include MidMarket Solutions, Performance Management, Expense Management, Time and Attendance, Organizational Planning, Recruiting Services, Employment Screening, Retirement Services, Business Insurance and Technology Services.
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