A Step-By-Step Guide to HR Outsourcing in Silicon Valley

shutterstock_1121696642Silicon Valley businesses need cost-effective employee benefits and HR administration and outsourcing their HR functions to a professional employer organization (PEO) could help accomplish this. Silicon Valley PEOs can provide businesses with all the benefits of traditional HR departments with the added benefit of cost-savings.  

If you are a Silicon Valley business owner considering HR solutions, read on to learn how to easily outsource your HR functions to a Silicon Valley PEO. 

Why Do Businesses Outsource HR? 

One of the main reasons why businesses outsource their HR obligations is to save money. HR outsourcing companies provide Silicon Valley businesses with the same benefits of a traditional HR department: payroll services, compliance, and workers' compensation insurance—but at a fraction of the cost. Outsourcing your HR responsibilities to a Silicon Valley PEO is the best way to grow your business without doing the heavy lifting associated with human resources management. 

How Does HR Outsourcing Work? 

One of the most comprehensive HR outsourcing solutions is a PEO. They take on the responsibilities of a traditional HR department— providing a cost-effective solution compared to the cost of hiring additional employees to take on these roles. Here’s how it works: 

Initial Consultation 

HR outsourcing companies will typically come in and do an initial assessment of your business's HR needs. During this consultation, you'll learn what services are available, and a good PEO will take time to learn about your primary challenges so they can offer solutions that resolve your pain points. 

Decision Making 

By providing payroll, benefits, and HR services and assisting with compliance issues under local, state and federal law, PEOs allow small businesses to improve productivity and profitability, to focus on their core mission, and to grow. Whether you’re looking for an HR partner to process payroll, administer benefits, or handle workers’ compensation, your aim is to select the best PEO that meets your company's goals.  

Handing Over the Tasks 

Your HR outsourcing partner will cover the specified tasks such as payroll services, workers' compensation insurance, and HR compliance. The PEO handles HR actions, but not without your input. You maintain control, and the PEO ensures you are in compliance with the law. 

HR outsourcing companies also offer a suite of other valuable services, such as benefits enrollment (administration) and training workshops. 

What Are the Advantages of Outsourcing HR to a PEO? 

Outsourcing your HR functions to a competent PEO will offer your business the following benefits of HR outsourcing

Streamlined Operations 

Your HR department's operations become much more streamlined and efficient since a single entity handles all the HR services. Businesses that outsource their HR departments report significant savings in time and money. 

All HR Services Under One Agreement 

Since all HR functions are covered under one agreement, signing multiple contracts with different providers is unnecessary. HR outsourcing companies are also more experienced in compliance with employment laws. It makes them much more adept at handling potential lawsuits than businesses who try to do it all themselves. Implementing proper HR practices from the start is the best defense to potential lawsuits 

Easier Transition to a Virtual Set Up 

Moving from a full-time employment model to a virtual workforce is much easier with a PEO. This is an option many businesses in Silicon Valley are implementing and one that works best when the company has a strong HR outsourcing program in place. 

The Truth Behind Common Myths and Misconceptions about HR Outsourcing 

Like any other service, misconceptions surrounding outsourcing your HR department hinder some from recognizing the benefits, such as increased savings and streamlined operations. 

Here are some common misconceptions about HR outsourcing and the truth behind each one.  

Misconception #1: The outsourced company can easily take control of your business operations. 

Truth: An HR outsourcing company will not control your business. You retain control of your business operations, including hiring and firing employees.  

Misconception #2: Third parties will share your information and data. 

Truth: PEO employees are fully vetted, highly trained HR professionals. They have secure tech to protect your data, and the nature of their work is inherently confidential.  

Misconception #3: It's more expensive to outsource than employ HR staff. 

Truth: Employing a full HR staff is incredibly expensive. The PEO relationship significantly reduces this cost for your business. PEOs offer a scalable solution so that companies get exactly what they need.   

What HR Functions Are Typically Outsourced to a PEO? 

A Silicon Valley PEO can handle the following HR functions: 

  • Training programs 
  • Benefits provision and administration 
  • Payroll services and associated tax filings 
  • HR consulting 
  • Employee background checks 
  • Compliance with federal and state labor laws 
  • HRIS software 
  • Workers’ compensation 

When Should You Outsource HR Functions to a Silicon Valley PEO? 

As a Silicon Valley business owner, you can outsource your company's HR functions in the following situations: 

  • When you want to free up your time from consuming HR tasks. 
  • When you want to reduce risks and costs. 
  • When you want to adapt to changes in the workplace or business environment quickly. 
  • When you need assistance with compliance issues. 
  • When you want to expand your HR department without hiring or firing employees. 
  • When you need support for a virtual workforce. 

Businesses in Silicon Valley are taking advantage of the many benefits that come with outsourcing their HR needs. The benefits enable them to streamline operations, reduce costs and liabilities, and more. They can focus on what they do best—running their business—while the PEO takes care of everything HR-related. 

Should Your Business Be Partnering with a PEO?