HR Outsourcing Toolkit

Transcription

1 HR Outsourcing Toolkit This toolkit presents you with TriNet s thought leadership materials that help you focus on maximizing your human capital regardless of the economic outlook. The HR Outsourcing Toolkit gives you four (4) complimentary tools in one PDF file to help you discover: READ MORE READ MORE WHITE PAPER: FINANCIAL OPPORTUNITIES OF HUMAN RESOURCES OUTSOURCING Financial Opportunities of Human Resources Outsourcing READ MORE READ MORE

2 WHITE PAPER Options for Handling Your HR Function

3 Options for Handling Your HR Function The decision to outsource our HR function to TriNet has given our employees greater choice and flexibility with respect to benefit plans. And it has allowed us to focus on our core competencies. Neil Glass Senior Vice President and CFO Ziff Davis Media Inc. Introduction HR is a necessity when you have employees. And what could be better than taking a set of duties which although a necessity, are not a core competence off your plate? According to a Small Business Association study, the average small business owner spends 25%+ of the time handling employee-related paperwork. This average increases to a staggering 35-45% if the tasks include recruitment, hiring, and training of new employees. After all, you have no interest in processing payroll twice a month, negotiating benefits with insurance carriers, or worrying about how to comply with a litany of government regulations. You entered into business to build a lasting legacy, deliver great products or services, and generate revenue doing what you do best. So why NOT outsource HR? Why Change from Do-it-Yourself HR? You didn t start up your business in order to manage human resources. And yet, because HR is complex, precious time and resources are used up as you handle it in-house. Why is do-it-yourself HR so overwhelming? Here are six main challenges that small businesses often cite: 1. Doing HR right can be time consuming The scope and responsibility of HR is broad covering both tactical and strategic activities. Unfortunately, tactical HR activities can consume most of the hours in a day and steal time from truly strategic activities. Doing HR yourself means allocating time for functions such as benefits planning, recruiting/hiring, training, managing personnel files, payroll/time reporting, performance reviews, manager development, annual merit evaluations, managing leaves and life status changes, plus lots of HR administration and compliance issues. 2. Explosion of benefit plan choices The explosion of benefit options has created a huge administrative burden for many businesses. Should your company offer HMO, PPO, High Deductible, POS, Health Savings Accounts, even Flexible Spending Accounts? What about Life Insurance, STD/LTD, Retirement Plans, Commuter Plans, and various Voluntary Benefits? If so, which ones will best fit the needs of employees and executives? Which plans will make it easier to recruit the talent you need? Figuring out which plans will make you more competitive is no easy task. 2 TriNet.com

4 Options for Handling Your HR Function With TriNet, EDL is able to focus on the strategies of the business, employee development, and operational excellence while partnering with TriNet to handle the back-office functions. Sue Fuller Director of Talent Management EDL Consulting 3. Many third party relationships to manage You will have to manage a payroll vendor, state tax authorities, health insurance brokers, health insurance carriers for medical, vision, and dental, and disability, as well as vendors for employment liability, voluntary benefits, recruiters, HRIS system, compensation data, employee handbook/policies, outplacement, legal guidance, and many others. Managing all these vendors also places a burden on the accounting team to reconcile invoices and pay vendors. 4. Many regulations The acronyms are numerous and adding up every year: COBRA, FMLA, ADA, OSHA, EEO, WARN, HIPAA, ERISA, FLSA, etc. And you will have to keep up with federal laws and labor laws specific to your state and region, plus an ever-changing tax code. 5. Lack of negotiating leverage Given their size, most small businesses simply do not have negotiating power when dealing with large insurance carriers and other vendors. Even a single event, such as an employee who gives birth to premature twins, can dramatically alter the cost of your medical benefits. Unfortunately, the end result can be a lack of control over escalating costs. 6. Too much paper and inefficient manual processes HR consists of multiple inter-connected business processes and multiple people involved in each process. Our clients tell us that their former in-house processes were ad-hoc and required manual effort, quickly turning into a paperwork nightmare. Three Options for Handling HR You have 3 basic options in regards to who can handle your HR function: Do-It-Yourself You can accomplish it on your own or offload the job to current or newly-hired internal staff. The upside is you control everything, which keeps costs low. The downside? You don t have the time to do it all not when generating business is the main priority. In addition, you own all the liability. One missed deadline or misunderstanding of a regulation, and you could damage your business. Pros You own the process Potentially lower short-term cost Cons Not enough time in the day You own all liability Inability to contain long-term costs TriNet.com 3

5 Options for Handling Your HR Function Our experience with TriNet has been one of excellent customer service, time-saving processes, and moneysaving products. Craig A. Anderle CFO Jacksboro National Bank Multi-vendor You can outsource to multiple vendors, utilizing each one for a specific task and area of expertise. This will probably entail finding a payroll vendor, another for benefits, another for your 401(k), and so on. The upside is you get experts to do the work, which saves you from doing HR administration tasks yourself. The downside is the amount of time spent managing the vendor relationships and eventually your lack of control over long-term costs. Using the multi-vendor approach can end up becoming a time-consuming referee match as you try to steer your patchwork of vendors toward a common goal. Pros Shifting some responsibility and administrative tasks to others Time saver in the short term Cons Ongoing management no one throat to choke Lack of data integration Leverages vendor expertise Short-term cost containment Employer-related liability Lack of control of long-term cost Single Vendor/PEO You can use a Professional Employer Organization (PEO) as a single vendor HRO solution. The fewer relationships a company has and the simpler the outsourcing process, the better. Select benefits of outsourcing to a single vendor include increased efficiencies, an improved employment brand, and a renewed ability to focus on the core business. In addition, many PEOs can offer a range of strategic services. These services go beyond the capabilities of a typical in-house HR department and therefore result in a competitive advantage. Such services include talent acquisition, performance management, and employee development. In terms of technology, the best PEOs have developed a single information system platform that powers all of their HR software systems. Many of them have also developed user-friendly business intelligence that aids executives in decision making, specifically related to salary levels, compensation trends, and workforce performance data. These online tools reduce paperwork and the overall administrative burden at small businesses. They are especially helpful for companies with multi-state workforces. 4 TriNet.com

6 Options for Handling Your HR Function The upside to finding a single vendor is that you manage a single relationship and gain HR expertise, HRIS technology, and a qualified team to manage your HR function. This saves time and cost in the long term. However, the downside is you must find the right HR partner one that tailors its services and cost structure for your specific industry because a wrong choice is a costly one. Pros Single point of contact Reduced time spent managing provider relationships Reduced employer-related liability Cons Perceived loss of control Some favor current vendor relationships Cost, depending on the situation Ability to leverage PEO expertise Long-term cost containment Time savings Robust technology Call Center support In general, PEOs can manage your organization s HR functions better and more efficiently than if you did it yourself allowing you to stay focused on your core mission. PEOs and co-employment The PEO accomplishes its work by sharing a tax ID with its customers. This is called a co-employer relationship. It enables a company to transfer many of its key employer responsibilities to the PEO, including aspects of employer-related risk and compliance. A formal Customer Service Agreement specifies the division of responsibilities between the PEO and its customers. Once your organization enters into a co-employment relationship with a PEO, your employees continue to work for you. You still retain complete control over operations, hiring and terminating your workforce, building your company culture, and defining your employment brand. But with the co-employment relationship, many of the other tasks related to administering HR become the responsibility of the PEO. These tasks include administration of payroll and benefits, providing HR services, and assisting with employer compliance. TriNet.com 5

7 Options for Handling Your HR Function Both U.S. and Canadian governments now recognize there are two employers in this situation, but for the most part government agencies look at the PEO as being the responsible party for the administration of HR. They consider the PEO the Employer of Record. This arrangement means your employees checks will carry the name of the PEO, though to the rest of the world, they are employed by your organization. And if there are any legal problems arising from the HR function, then the PEO assumes some of that risk. Is there a downside to co-employment? There can be, if you partner with the wrong one. When you use a PEO to handle HR and employee administration, you are putting a great deal of trust in another company. You want to make sure you select a PEO that has a proven track record, extremely efficient systems, and solid financial strength to ensure it will be around for the long term. Using a PEO for your business should be considered a long-term strategy, not a short-term fix. TriNet client case study One company that has gone from a multi-vendor arrangement to a single vendor/ PEO is Bank of Central Florida. They switched to TriNet (formerly known as Gevity in Florida) and realized immediate savings. CFO Kerry Charlet explains why their decision has been a cost-effective one: When compared to the renewal quote from our incumbent provider (based on an individual group plan), we estimate that we save approximately $50,000 per year between the employer and employee cost savings for our health insurance plan. This represents about a 25% savings in total costs. 6 TriNet.com

8 WHITE PAPER: WHAT IS A PEO What is a PEO? An introduction to the PEO model and its benefits for small and medium-sized businesses

9 What is a PEO? It s great to be able to rely on an HR department without necessarily owning an HR department. When you need TriNet, they re there to answer your questions. Roy L. Burger Chairman & CEO FirstNet Learning The term PEO stands for Professional Employer Organization. PEOs provide small-medium size companies with outsourced human resource services, specifically employment and HR management services. PEOs are not staffing companies. Traditionally, PEOs manage functions such as payroll, employer tax compliance, employee benefits, workers compensation, and government compliance, but those services have steadily expanded to include optional services such as talent acquisition, employee training, and performance management. The website of the National Association of Professional Employer Organizations, NAPEO ( explains that PEOs bring value via: Relief from the burden of employment administration. A wide range of human capital strategy and guidance services offered via a team of experienced professionals. Improved employment practices, compliance, and risk management to reduce employer-related liability. Access to a comprehensive employee benefits package, allowing smaller companies to be competitive in a tight labor market. Assistance to improve productivity and profitability. PEOs Unique Selling Point: HR Isn t Your Main Business The reason for the existence of PEOs and the primary selling point for their business model is this: as an entrepreneur, you did not enter into business to become a human resources manager. You have no interest in contending with payroll twice a month, negotiating benefits for your employees, or worrying about how to comply with a litany of government regulations. You entered into business in order to sell a product or provide a service, and generate revenue doing what you do best. But HR is a necessity when you have employees. And what could be better than taking a piece of your business which although a necessity, is also a distraction off your plate, and making it somebody else s problem? 2 TriNet.com

10 What is a PEO? Is Your HR Systematized? Businesses succeed by building good systems. Your organization has likely systematized the financial part of the business because you recognize how important it is to have a strong financial system in place. Likewise, you probably have refined systems for your company s operations and customer service. But do you have a systematic approach to HR? For example: if you hired a good person today, what s your guarantee you can hire a good person tomorrow? Is it a repeatable process? Do you know the right way to source benefits year after year? Do you know how to build the proper infrastructure for attracting and retaining talent? Were you lucky your last hire took a job at that salary, or did you have some understanding of current compensation levels? At the same time, do your employees have access to the systems they need to succeed? Can they manage their payroll and benefits information? Can your managers hire, terminate, and administer their employees data? Can your executives access your company s data via dashboard reporting? These are also components of a systematic approach to HR. Who Can Do Your HR? You have 4 basic choices in regards to who can handle your HR function: You can do it yourself, or offload the job to current internal staff. You can hire additional administrative and HR staff. You can outsource to multiple vendors: one vendor for payroll, another for benefits, and so on. However, doing so can end up becoming a time-consuming referee match as you try to steer your patchwork of vendors toward a common goal. You can use a PEO as a single vendor solution under a co-employer relationship. Especially for professional industries where having top talent is the main asset of the business, the reality is this: PEOs can manage your organization s HR functions better and more efficiently than if you did it yourself, allowing you and your organization to stay focused on your core business. TriNet.com 3

11 What is a PEO? PEOs and the Co-Employment Relationship The PEO accomplishes its work by sharing a tax ID with its customers, which is called a co-employer relationship. This arrangement enables a company to transfer many of its key employer responsibilities to the PEO, including aspects of employerrelated risk and compliance. A formal Customer Service Agreement specifies the division of responsibilities between the PEO and its customers. What Is Co-Employment? The Three-Point Relationship Your relationship with your employees right now looks like this: just your organization and its employees. Once your organization enters into a co-employment relationship with the PEO, your employees still work for you. You still retain complete control over your operations, hiring and terminating your workforce, building your company culture, and defining your employment brand. But with the co-employment relationship, many of the other tasks related to administering HR become the responsibility of the PEO. 4 TriNet.com

12 What is a PEO? Both U.S. and Canadian governments now recognize there are two employers in this situation, but for the most part government agencies look at the PEO as being as the responsible party for the administration and HR. They consider the PEO the Employer of Record. This arrangement means your employees checks will carry the name of the PEO, though to the rest of the world, they are employed by your organization. And if there are any legal issues arising from the HR function, then the PEO assumes some of that risk. An analogy: It s like going from having one parent (the employer), as most businesses have it today, to having two parents. As the initial employer, you are still responsible for operations. But the functions that aren t core to running your business are assigned to the other parent, your PEO. Is there a downside to co-employment? There can be, if you partner with the wrong one. When you use a PEO to handle HR and employee administration, you are putting a great deal of trust in another company. You want to make sure you select a PEO that has a proven track record, extremely efficient systems, and solid financial strength to ensure it will be around for the long term. Using a PEO for your business should be considered a long-term strategy, not a short-term fix. TriNet.com 5

13 What is a PEO? Benefits of the PEO model The advantages of the co-employment model are substantial. One: You don t have the time to waste. With a product to develop and a business to grow, the last thing you probably want to do is spend time mastering the universe of complex employment related regulations. Furthermore, a large part of the HR function is assessing, negotiating for, and providing benefits options for your employees. This will also be a drain on your time, even if you engage with a benefits broker. There are options to wade through and many negotiations with carrier representatives to tackle. If you choose to outsource to multiple vendors, you run up against the same problem. It takes time to manage these relationships individually and make sure they work together without problems or errors. Imagine having to inform each of your vendors about any changes in manpower, or coordinating both internal and external systems that affect payroll and/or benefits. The opportunity cost of all this effort can be substantial. The highest and best use of your (or your HR person s) time is in building your core business. You cannot be as efficient as a PEO s service team of professionals. You should be focused on perfecting your product and building a market. Anything else is a step backwards. Two: PEOs can position you competitively in the talent market. PEOs that deal with a large number of customer organizations aggregate the employees of each company. This allows PEOs to negotiate for benefits plans on the customer s behalf by leveraging the combined size of thousands, or even tens of thousands, of employees. PEOs can then offer even small to medium-sized customer companies the same benefits plans that large corporations enjoy. This enables PEO customers to attract and retain key talent that might otherwise choose to work at larger, more established organizations. 6 TriNet.com

14 What is a PEO? We chose TriNet s outsourcing solution because they offered the widest range of HR, payroll, and benefit services. Jerry Panagrossi Director, Technical Consulting Symbian, Inc. Alternatively, if you negotiate for benefits plans on your own, you re spending time evaluating vendors. And to those benefits vendors, you re just one small company. If PEOs pick a benefit plan, it s a benefit plan for thousands of people. It contains options and plan features that smaller companies simply can t obtain, much less afford. The best PEOs offer a wide range of benefits, not forcing any one medical, dental or plan on an employee but rather emphasizing flexibility and choice in regards to multiple plan options. This same strategy is in play in large companies. Three: PEOs employ HR professionals that understand your business. It s likely that you either don t employ HR professionals at all, or have staff with more strategic issues at top of mind than HR concerns and employee administration. A PEO can help. A top-quality PEO will employ human capital consultants who are familiar with your specific industry, enabling them to anticipate and resolve your problems and act as a true strategic partner. They can assist you with interviewing strategies, training, performance management even succession planning. They can be a genuine asset to your company s growth and success. Four: PEOs help minimize your company s risk. Your organization needs people to operate the business, but at the same time, those very resources those human resources -- are in and of themselves a liability. In fact, your company may be at risk of running afoul of a minefield of employment laws. There are only three things you can do with such risk: Offload every bit of employer-related risk that you can. Share as much as you can. Manage what s left to the best of your ability. PEOs offer support in all three of those areas. You can offload much of the risk to PEOs, and then they can assist you in managing the risk that s left. It s a proactive defense against employer-related liability in your organization. As a co-employer, PEOs assume part of your employer risk and it s in the PEO s best interest to guide you accordingly. Issues such as workplace safety, sexual harassment even the production of employee handbooks are all matters that PEOs handle on a daily basis in the effort to minimize risk for themselves, their customer organizations, and the employees that they service. TriNet.com 7

15 What is a PEO? Minimizing risk simply means taking a proactive versus reactive stance towards liability. People are typically putting in these components in their business after going through a certain amount of pain perhaps an expensive lawsuit or a heavy fine. It makes more sense to prevent these hardships. An ounce of prevention is worth a pound of cure. Due Diligence in Choosing a PEO: Seven Tips Selecting the right PEO to partner with is a critical decision for your organization. You need to align yourself with a trusted player in the PEO industry. Here are some tips on finding the right PEO: 1. Find a legitimate and stable PEO. Select a PEO partner that has been around for some time, and looks stable in its financials as well as in its systems. Look at their history and their credentials. The best PEOs generally have accreditation from the industry s watchdog organization, the Employer Services Assurance Corporation (ESAC). ESAC continually monitors HR outsourcing firms for adherence to important financial, ethical, and operational standards. Another good resource for information on quality providers is the National Association of Professional Organization (NAPEO) website ( Be sure the PEO can serve your employees in all geographic areas where you have employees. Some of the larger PEOs provide service in all 50 states, and some offer international services as well. 2. Find a PEO that solves issues quickly and effectively. The PEO you choose should have systems in place that give good service and by service, we mean two things: direct access to someone who can answer your employees questions, no matter how trivial those questions may seem, and the option of self-service HR tasks via an online platform. Do they have a dedicated toll-free call center? Are there multiple points of access given to you: phone, fax, , chat? Do they even answer their phones? Is there an online system in place which allows employees to do routine tasks such as ask for vacation leave? Is there a technology in place that allows managers to keep track of the people they manage, and maybe even assess their performance? One way to find out about a PEO s service technology is to check customer and professional references. What their customers say about the PEO will indicate how well their service will work for your organization. 8 TriNet.com

16 What is a PEO? 3. Understand how you are being charged. There are two basic ways PEOs charge their customers. There s the break-out model, where you are shown what each category costs: workers compensation insurance, benefits, service fees, etc. And then there s the bundled model where payments are grouped together in various ways. A transparent set of fees will be easier to understand than a percentage of payroll fee and the latter can be tremendously expensive if your organization employs highly compensated people that routinely accrue bonuses and salary increases. 4. Look for better benefits. Benefits are a key way to attract and retain the talent you need to remain competitive. You simply can t skimp on them. To make the cut, HR outsourcing candidates should offer a package that provides all the benefits that large companies offer their employees. Features should include: A wide range of options for each employee to choose from Coverage for new hires with little or no waiting period No pre-existing condition exclusionary clauses No individual underwriting Guaranteed issue coverage In addition, make sure the HR provider offers a stable health care provider network with modern administration systems. If you have any employees working out of state or perhaps out of the country, pick a partner that has mastered the complex issues associated with a dispersed workforce. A PEO with this expertise is especially important if you are expanding operations overseas or recruiting foreign employees to the U.S. 5. Verify the employee risk pool matches the employer s profile. An HR provider that mixes your relatively low-risk staff with other employers higher-risk group of employees almost ensures your health insurance and workers comp rates will rise faster than market rates. Scott Stanton, CFO of International Association of Exhibitions and Events a trade association that represents more than 6,000 individuals involved with the exhibition industry switched providers for that very reason. He stated, We were with another HR provider for a while, but their customer base was largely blue collar and low wage. That meant the provider could not control the risk associated with its own customer profile, and as a result, IAEE was seeing rapidly escalating benefits costs year after year. We saw a 30% increase one year, and then 45 percent, and then 90 percent! TriNet.com 9

17 What is a PEO? Offering generous benefits is in sync with our firm s strategy for keeping and retaining people, so getting premium benefits packages from TriNet is a logical step. Bill Daniels CFO Asset Management The company quickly found an HR provider that specialized in high wage employees, and made the switch. Being grouped together with companies that resembled its own industry and workforce profile made all the difference financially. 6. Ensure that the service provider meets all state regulatory requirements. Regulations vary from state to state, so ensure that the PEO you pick complies with the laws in your area. If you have employees in multiple states, make sure that your PEO can easily handle HR for those states. Ideally your PEO should be able to handle HR and administration anywhere in the 50 states, or at least in all states where you will have employees. 7. Find out how long it takes to transition. Ask about the set-up process; how many days will it take? How much paperwork will it entail? Or is the process mostly online? How much hassle will you have to go through in the transition process? TriNet customer case study: Asset Management One company that has entered into a co-employment relationship with a PEO is Asset Management, a small venture capital firm that seeks to deliver fundamental change to economies, industries, and societies in the areas of information sciences and life sciences. When CFO Bill Daniels joined the firm, he quickly realized that the firm could gain additional efficiencies in the realm of human resources. He had high-level employees who were handling HR issues and those employees had far better things to do with their time. Daniels recalls, Previously we had a controller who, by default, was in charge of payroll and benefits issues. It didn t get a lot of her focus because she had far more pressing challenges in front of her. When I joined the firm, I asked what her biggest problems were, and she mentioned the time and energy spent on handling mundane HR administrative tasks. Fortunately, he already knew where to go. I had previously worked with an HR outsourcing company, so I told her We can take care of that. And I brought in TriNet. 10 TriNet.com

18 What is a PEO? A Full Suite of Benefits and HR Services One of Asset s biggest concerns was the cost of healthcare; it just kept rising and rising. Daniels points out, With TriNet, we re able to join forces with thousands of other companies to get the purchasing power we need to obtain high-quality benefits. Offering generous benefits is in sync with our firm s strategy for keeping and retaining people, as we also offer generous compensation and a 401(k) match. So getting premium benefits packages from TriNet is a logical step. He continues, We gain other advantages as well. Prior to engaging TriNet, we had no employee handbook, no policies or processes written down, and no real documentation for workforce management and administration. That s a dangerous way to go but TriNet provides the infrastructure we need. A Long-Term Strategy The self-service features are beneficial to Asset s team as well. We like being able to tell our employees that all they ll need is a computer screen and a phone number to resolve most of their issues. TriNet handles the rest. Having TriNet as a single point of contact for Asset Management s entire HR function has proven to be a durable long-term strategy for the firm. It s a partnership that I intend to continue. It allows us to keep our focus on our portfolio companies. It really has worked great for us. More information on PEOs Visit the National Association of Professional Employer Organizations (NAPEO) at More information on ESAC, the organization that provides accreditation for PEOS at Check out the Demo Demo: TriNet.com 11

19 WHITE PAPER: FINANCIAL OPPORTUNITIES OF HUMAN RESOURCES OUTSOURCING Financial Opportunities of Human Resources Outsourcing

20 Financial Opportunities of Human Resources Outsourcing In an effort to realize greater efficiencies, a growing number of companies are consolidating HR outsourcing functions into an integrated solution offered by a single provider. Introduction There are many challenges to running a business. However, the up side, the one you value most, is that you get to be in charge. The product is your brainchild. How and when it hits the market is also up to you. Whom you hire is also your decision. You have just enough resources to hire the best and the brightest, provided you contain your operating expenses. What you did not expect is the rate hike from your healthcare provider and the news that your workforce is too small to qualify for a high-end benefits package. You will have to spend more of your time finding a new provider because your HR administrator can barely keep up with the paperwork as it is. Administrative overload is growing in direct relation to the accumulating Excel spreadsheets containing your HR data. If your company is running HR software, you may find the program just can t scale to handle your expanding workforce. You ve needed a more powerful program for a while, but you ve been putting off the purchase because it would also entail a hardware upgrade and bringing back the IT consultants to implement and manage it. Your resources and your time are your most value assets. Yet, every year, they are being consumed by the growing complexities of HR administration. Neither the evolution of technology nor the laws demanding mountains of paperwork are under your control. And you are in no position to stop, or even slow, the escalating costs of healthcare. What you can do is take action to contain the overall costs of HR. Outsourcing human resources to a Professional Employer Organization (PEO) has been the most effective way for thousands of companies across the U.S. to continually provide high-quality HR services while saving time and protecting their bottom line over the lifespan of their business. This white paper will explore the financial benefits from contracting with a PEO based on industry best practices and TriNet s experience as a leading PEO for small businesses since Time Sink of Transactional HR: Adding Up Administrative Tasks Administrative HR involves the day-to-day transactional tasks included in a variety of activities from processing payroll and benefits claims to updating employee records and paying into 401(k) plans. According to a recent Small Business Association study, the average small business owner spends up to 25 percent of his or her time handling employee-related paperwork. This range can easily shoot up to the 35 to 45 percent range when time spent on other HR tasks, such as recruiting, hiring, and training is added to the mix. 2

21 Financial Opportunities of Human Resources Outsourcing The transactional tasks of administrative HR are inextricable components of running a business. Inextricable, however, is not synonymous with in-house. Because administrative HR tasks have nothing to do with your core business objectives, a reputable PEO can seamlessly take responsibility for them. By outsourcing mundane and labor intensive HR, you will not only keep control of your business, you will have more time to devote to improving your bottom line. Saving Hours by Outsourcing The time you save by outsourcing HR can vary greatly, depending on how many providers you use and how much of the administration you choose to keep inhouse. If you choose the multi-provider approach using a different vendor for each of your administrative tasks you ll need to factor in the time required for soliciting, reviewing, and comparing different vendor proposals. Then add to the list, the ongoing management of a multi-provider network with the associated IT integrations and you ll find that time saved by outsourcing may fall far short of its potential target. In an effort to realize greater efficiencies, a growing number of companies are consolidating HR outsourcing functions into an integrated solution offered by a single provider. These companies have found that their PEOs are professionally and technologically equipped to handle the full range of HR services, provide a single point of contact, and ensure full customer service all the efficiencies that result in true time savings for your company. In a national survey supported by the National Association of Professional Employment Organizations (NAPEO) and the Society of Human Resource Management (SHRM), 89 percent of PEO customers reported that PEOs significantly reduced the time it took to perform HR transactions. The survey reported the following savings based on company size: Hours Per Week Saved Number of Employees 3

22 Financial Opportunities of Human Resources Outsourcing In a national survey supported by NAPEO and SHRM, 89 percent of PEO customers reported that PEOs significantly reduced their time demands. Zeroing In on Time Saved A closer look at a typical TriNet customer reveals how a small business accrues time savings: Company Profile Employees: 30 Average Salary: $90,000 Annual Payroll: $2,700,000 ($90,000 x 30) Total Payroll Hours: 62,400 (30 x 2080 hrs/yr) Average Hourly Pay Rate: $43/hr ($2.7 million/62,400) Annual Revenue: $5 million Average Revenue Per Payroll Hour: $80 per payroll hour ($5 million/62,400) Time Saved In-house HR Administration Before Outsourcing: 1,872 hrs/yr (62,450 x 3%)* After Outsourcing: 468 hrs/yr (or 75% reduction) Hours Saved: 1,404 hrs/yr Financial Opportunity in Dollars and Days: Bottom Line: -$60,372 (1,404 hrs x $43/hr)** Top Line: +$112,320 (1,404 hrs x $80/hr) Days Free for Bottom Line Business Activities: +175 * The U.S. Chamber of Commerce estimates that 3-7% of a company s payroll hours are spent on administrative, non-core activities. ** The figure reached for bottom line savings assumes that the employer leverages the outsourcing arrangement to reduce staff. It s important to note that this step is not a requisite of the outsourcing arrangement; the employer could choose to retain current staff and focus on top-line savings. About this Chart: This chart represents a conceptual financial opportunity that a TriNet customer, fitting specific salary and workforce requirements, may encounter as a result its outsourcing arrangement. It demonstrates that HR outsourcing presents the customer with the opportunity to realize bottom-line savings, resulting in a reduction of administrative headcount, or top-line savings, in which current staff are redeployed to revenuegenerating activities. The customer could also choose to simply incorporate the time savings as part of a standard lifestyle business in which recreational or leisure hours are prioritized over revenue. The chart is only intended as a conceptual illustration; factors unique to a particular business may affect the outcome of its outsourcing arrangement. You should consult with legal, financial, and HR professionals regarding the potential benefits of HR outsourcing for your own firm. 4

23 Financial Opportunities of Human Resources Outsourcing The highest quality benefits packages are those that are easily customized to meet the individual s needs because they offer the widest range of carriers and options for medical, dental, and flexible spending accounts. Long-Term Cost Containment: Leveraging Economies of Scale Holding down long-term HR costs can only be achieved through economies of scale the more people requiring the same service, the less the service costs per person. The most significant HR areas of cost containment are benefits and technology support, which is why the goal of all companies is to offer the best possible benefits options for the right cost. Cost-Effective Group Health Plans TriNet constantly researches the differences between our group-sponsored plans, other available group plans, and the individual plans offered by various carriers. Our findings can be summarized very briefly: individual plans appear as though they provide a mildly decreased level of coverage for a greatly reduced price, but in point of fact they could seriously impact our customers ability to protect the health and welfare of their employees. One of the most important differences between group and individual plans is something called medical underwriting. Individual plans require the applicant to disclose information about his or her past medical history before the application will be accepted. Depending on the applicant s health history, the rates could be increased significantly before coverage is actually offered, and pre-existing conditions may be uninsured. In some cases, coverage may be denied altogether. TriNet plans, in contrast, are offered on a guaranteed-issue basis. This means that coverage is available to everyone at the published rates without exception regardless of their past medical history. This guaranteed issue policy does add a significant amount of cost to our plans, but it ensures that every full-time, regular employee is covered while employed at one of TriNet s customer companies. Neither TriNet nor our customers will face the legal and financial consequences of having uninsured, full-time employees on the payroll. Personalizing Customer Service Most employees will rest easier knowing they have access to customer service representatives who can troubleshoot benefits issues and get answers to their questions immediately. With a PEO, you won t need in-house, on-call HR specialists to field emergency calls, enrollment issues with new hires, or routine administration snags. PEO staff have all the answers because their entire focus is on HR. TriNet s own call center offers toll-free access to subject matter experts, plus an HR Consultant Hot Line for your managers who need instant assistance with HR-related matters. About 80 percent of employee issues are resolved by TriNet within the first call; the remaining are escalated and resolved within an average response time of two hours. For non-urgent issues, employees can contact TriNet s Solution Center via or online instant chats for comprehensive answers to all their questions. 5

24 Financial Opportunities of Human Resources Outsourcing Your Account Management team provides the same level of day-to-day support to your managers as TriNet s customer service representatives offer to your employees. They re available to help walk you through our online Customer Set Up process, assist with special requests such as payroll needs, and generally ensure that you and your managers are comfortable and satisfied with every aspect of TriNet s HR services. Accessing an Integrated Technology Solution The world is now web-enabled and most professionals, especially those in the technology and finance field, have come to expect anytime, anywhere access to their HR information and the ability to update their data with a simple click of the mouse. But the cost of implementing and maintaining a state-of-the-art HR information system (HRIS) is simply out of reach for the average small and medium business. With a PEO, this is no longer a problem. PEOs license and maintain their own enterprise-level platforms that can handle all their customers HR administrative processes. Benefits Purchasing & Administration Payroll Processing and Administration Cafeteria Plan Administration Workers Compensation Insurance EMPLOYER HR SERVICES EMPLOYEE HR SERVICES 401(k) Benefit Services Flexible Spending Accounts Comprehensive Health and Welfare Benefits Unemployment Insurance Claims Online Benefits Enrollment P O R T A L S E L F - S E R V I C E Human Resources Assistance Payroll Direct Deposit P H O N E EMPLOYEE EMPLOYER C H A T Business Management Reporting Tools Online Employee Handbook E M A I L I N P E R S O N Employee Relations COBRA and HIPAA Administration Self-Service Transactions Toll-Free Solution Center Policies and Procedures EEO Reporting Labor and Benefit Law Compliance COBRA and HIPAA EEO Reporting Compliance Payroll Tax Compliance 6

25 Financial Opportunities of Human Resources Outsourcing TriNet s customer portal, HR Passport, is integrated on the back end with powerful Oracle and PeopleSoft platform to deliver the industry s fastest and most accurate service. On the front end, users enjoy access to a portal that is easy to use and highly customizable, allowing managers and employees to access and administer HR transactions from any desktop computer. Your staff can access their HR information online from their own computers, change options during open enrollment, set up direct deposit, update personal information, change withholding on their W-2s, and perform manager-level transactions such as hiring and submitting payroll all without losing productivity in the work day. A wide range of additional information can be posted online to help your employees make the right choices, including handbooks and FAQs on benefits offerings, and online chat and customer service. Managers will also find that PEO online services streamline access to company data and reports. The prospect of transferring your company s personnel data off site may give you pause. Yet, using a PEO will provide you with more control over processes and improve the quality of information. With a dedicated, highly trained IT staff, a PEO s HRIS system suffers fewer data errors and offers greater timeliness of reports, more consistency in delivery, and tighter security. Leveraging the power of online HR doesn t mean compromising security. TriNet, for example, protects its Internet-based services with SSL encryption, individual passwords, leading edge firewalls, and intrusion detection systems. Going for Integration Our state-of-the-art HRIS offers the maximum efficiency for processing transactional HR, mainly because it is comprised of a single platform. The system integrates the latest personal data into all HR services applying to a particular individual. Seamless data integration is what makes payroll and benefits process faster, cheaper, more accurately, and securely. Integration is what drives your ROI. How TriNet s Payroll Services Running PeopleSoft HRIS Work: Authorized payroll contacts at your company use TriNet s secure portal to enter department based payroll hours. A designated manager or department head approves the payroll data and submits it to TriNet each payroll cycle. Online payroll reports are available to authorized users. EMPLOYER EMPLOYEE Employees access electronic copies of their paychecks, set up and maintain direct deposit accounts, adjust tax withholdings, and review paid time off information. Employees print their paychecks at any time for use with loans and financial planning. 7

26 Financial Opportunities of Human Resources Outsourcing When the PEO administers any employee benefits programs related to retirement plans, health plans, life and disability insurance, or credit unions, it leads the way to benefit plan compliance with applicable state and federal laws. This also includes the plan s testing, filing, and other obligations. Risk Avoidance: Share the Liability, Focus on Your Business In this litigious climate there is little room for administrative error. If a company incorrectly handles any of its numerous HR functions, it is at risk for a lawsuit. If filing deadlines are missed, the resulting fines and penalties can erode the bottom line of any small or medium business. As the complexities of compliance multiply each year, companies are forced to spend more time on avoiding risk and less time on revenueand profit-generating activities. Sharing Legal Responsibility When you contract with a PEO, you can focus on a marketing campaign or signing on a new client knowing that all the mounting transactional HR tasks and the risks associated with them are shared by a partner. You can even go ahead and build a distributed workforce tap into talent anywhere in the country without keeping track of payroll withholding and workers compensation requirements of other states. The PEO takes responsibility for the HR tasks and shares the risks you take back the focus on your business. How does this work? Some states regard PEOs as co-employers and the IRS recognizes PEOs as employers because they assume certain legal rights and duties for their customers employees, such as paying wages and related withholdings taxes. This means the PEO is liable for paying these taxes whether or not the PEO is paid by the client. The PEO must also provide the employees with workers compensation, state and federal unemployment, and statutory disability coverage. Moreover, when the PEO administers any employee benefits programs related to retirement plans, health plans, life and disability insurance, or credit unions, it leads the way to benefit plan compliance with applicable state and federal laws. This also includes the plan s testing, filing, and other obligations. 8

27 Financial Opportunities of Human Resources Outsourcing In most circumstances, the PEO also contractually agrees to assist with compliance with the regulations of Fair Labor Standards Act, COBRA, the Family Medical & Leave Act, the Health Insurance Portability & Accountability Act (HIPPA), and many others. PEOs are legally obligated to stay on top of all employment laws and regulations so they can provide their co-employees with compliant worksites. This is no small task given the explosion of employment laws in the last 25 years. According to the U.S. Small Business Administration, the number of employment-related laws and regulations grew by 60 percent between 1980 and 2000 alone. But the PEO provides a back office team that boosts your ability to identify and resolve risk-related issues before they consume your business. Keeping Track of Records Since 2000, a new legal emphasis on records retention has compelled businesses to invest more heavily in records management technology and practices that prepare them at all times to produce claim forms, W-2s, reimbursement invoices, and a wide range of other documents all at a moment s notice. Whether the information is five weeks old or five years old, PEOs shoulder all the responsibility for storage and retrieval of HR-related data. Records are typically backed up to off-site devices to insure against data loss from on-site technical failure or disaster. In the event of an audit, inquiry, or claims dispute, your PEO is always equipped to rapidly locate and produce the record in question. In short, they assume many HR responsibilities, which include recordkeeping and documentation as well as explanation. Because shouldering burden of proof is a key component of their services, PEO staff has the regulatory expertise and technological tools to handle the growing volumes of a company s HR records as the business matures. 9

28 Financial Opportunities of Human Resources Outsourcing Regardless of how extensively you use a PEO, its representatives whether they are customer account managers, customer service representatives, trainers, or recruiters will work closely with your workforce over the long-term. Positioned for Tomorrow: Designing a Lean & Efficient HR The time and costs savings from outsourcing HR are hard to pass up. Yet these benefits are merely part of a much more significant return on investment from your company s relationship with a PEO. Once you re relieved of the HR administrative burden, you can refocus your attention on sustainable, revenue-generating activities. A key component of this strategy is revving up lean and efficient HR processes to develop your most valuable asset your employees. Launching Employee Productivity For small businesses, especially startups, it s crucial to attract the type of highly skilled and motivated professionals who can hit the ground running. In these types of businesses, there s the undeniable charge that results when strong entrepreneurial vision, market forces, and investment dollars come together. In the excitement, it s all too easy to miss the signs of chaos and dissatisfaction growing daily in the work environment and threatening to undermine worker productivity. PEOs take care of the HR administration to leave you and your employees to focus on what you do best. With a PEO, you have the time to deliver the full range of support and direction your workforce requires to sustain high performance. It s essential to get your business on solid footing with all HR administrative processes up and running painlessly and in record time. Regardless of how fast a business grows, its new hires should always expect to receive their first paycheck and their health coverage to kick in exactly on schedule. Sustaining Satisfaction Recruiting, training, fine tuning policies and procedures, and creating a company culture are the building blocks of workforce development. Thanks to outsourced HR administration, your HR managers can devote more quality time to all of the above and turn to their PEO for additional expertise. PEOs like TriNet are staffed with HR professionals who can be called upon to perform a wide range of HR services, from trainings on team building and stress reduction to answering employee questions on benefits and screening recruits. The value of TriNet s services is not merely that they are available, but that they are truly flexible and tailored to suit your particular budget and business requirements. At TriNet, one size does not fit all. Wireless device leader, Socket Communications, has tapped frequently into TriNet s extended services menu since becoming a customer ten years ago. TriNet gives us guidance on everything from 401(k) providers to employee ergonomics to workers compensation, says Socket CFO David Dunlap. As Socket grows we can add additional layers of on-site support as needed. For us, the ability to gain increments of support personnel is invaluable. 10

29 Financial Opportunities of Human Resources Outsourcing Recognizing the Power of Partnership Regardless of how extensively you use a PEO, its representatives whether they are customer account managers, customer service representatives, trainers, or recruiters will work closely with your workforce over the long-term. That s why compatible corporate culture is one of the top criteria companies look for when choosing a PEO. And that s why companies with professional and technical workforces are a natural fit for TriNet. With its own lean and efficient professional staff of 450, TriNet doesn t have to work at communicating with a customer. It already speaks the same language and shares the same commitment to high-level performance and sustaining competitive advantage. State-of-the-art technology and cost containment may be the key features of TriNet s services, but TriNet s main priority is developing relationships with the people who use those services. Their professional satisfaction and success means their business wins, and so does TriNet. 11

30 WHITE PAPER: WHY THEY CHOSE INTEGRATED HR OUTSOURCING Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies

31 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies The time and effort of managing multiple vendors can often offset the up-front cost savings. Introduction Picking through the white noise about outsourcing can be time consuming and tedious. And while you re busy doing all that research, your company s payroll and benefits problems aren t going anywhere. You need to outsource but you re not clear on the alternatives available to you. If you re in this position, these case studies are designed for you. They provide a research tool for smaller companies by describing the reasons why three companies, all under 100 employees, decided to outsource their human resources to an HR service provider. It presents a picture of what other companies have done when faced with the challenge of wading through a crowded vendor landscape, evaluating their alternatives, and making a final decision. Who Should Read This? You will want to read this document if you are evaluating HR outsourcing alternatives for a company between employees. The profiled companies are honest about both their reasons for choosing their HR provider, as well as the challenges that drove them to outsource. Reading their stories will provide you with the context you need to understand HR outsourcing. Companies Face Several Alternatives Outsourcing isn t the only answer. Most small companies face a complicated decision path when deciding what to do with business non-core functions. This is because small companies, even moreso than their larger counterparts, need to focus on their core competency with laser-like precision. Any function that doesn t directly relate to that core competency distracts the workforce from developing the company s product or service. When faced with human resource challenges, companies have three alternatives: Create or Improve the In-House Infrastructure Pros Creating an in-house infrastructure gives business owners the confidence that they are building the HR processes that s right for their company, and psychologically it offers a sense of control. It allows a business owner to create a company culture from the ground up by hiring employees who oversee the general environment, character, and personality of the company. 2

32 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Cons A smaller company may not have the time and resources to build such an infrastructure. That time may better be spent on developing the company s product or service. It s also possible that the right HR provider which forms a true match may indeed be able to contribute to the company s internal culture by streamlining processes and offering high-level HR expertise. Multiple Vendors Pros If the decision is made to outsource the HR function, companies may choose to seek out providers that handle disparate functions. For example, they may select a benefits broker and a separate payroll provider. The advantage to this approach is cost driven; a company can generally spend less on providers that specialize in handling one particular function. That s because single-function providers tend to do large volumes of business in order to keep their price point low. Cons The time and effort of managing multiple vendors can often offset the up-front cost savings. This is particularly true if the vendors deal with related functions such as payroll and benefits but use separate systems or databases to do so. This means that the functions aren t integrated and can often prove extremely difficult to manage properly. In addition, large volume providers may not offer the individual attention or the range of services that the company truly needs, undermining the attractiveness of the lower cost. Single Vendor Pros The HR outsourcing landscape offers the ability to outsource to a single provider. These integrated providers offer payroll and benefits together on a single platform, as well as high-level HR expertise in the form of on-site staff. Single-vendor providers can act as a company s entire HR department and prevent the need for in-house staff or infrastructure. Cons The primary disadvantage of an integrated outsourcing provider is that the service may be overkill for a company that only needs to offload a single HR function. For example, if payroll is the primary problem, the company probably only needs a payroll provider rather than an end-to-end service. In addition, an integrated provider may offer a degree of flexibility in its service but may not be able to accommodate specifics requests from its customers (for example, building electronic timesheets into its online services). 3

33 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies The up-front cost of integrated HR can be daunting. What s important to recognize is whether those costs are made up elsewhere. Susan Vandegrift VP of Finance Synergenics Case Study: Synergenics The Background William Rutter, former CEO of Chiron, founded Synergenics in order to invest in biomedical field and technology companies. Synergenics provides its related family of biotech startups with laboratory space, business development, and administrative backbone. Synergenics currently has about 5-10 companies under its watch. The Challenge Synergenics had to gain affordable health insurance fast, but their options were limited. They were too small to get a cost-effective health insurance package that would also offer disability and life insurance. They knew their employees would need a minimum level of benefits offerings but they also had a budget to manage. In this situation, having benefits in-house wasn t feasible. They needed a provider that could aggregate many companies into a single pool and offer affordable, large company benefits. They found that payroll services were easy to find, but it was difficult obtaining small business health insurance at reasonable rates. The Alternatives Having decided that an integrated HR provider would serve their needs more efficiently than a single-function provider, their primary objective was to obtain affordable health care. They looked for this competency in prospective vendors. They also wanted to determine how much time it would take to manage the vendor relationship. 4

34 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Why Did They Choose TriNet? The TriNet rates on health insurance and workers compensation made up the cost of the service fee, and TriNet was able to get Synergenics and its related family of biotechs up and running quickly. It helped that the employees had a direct link to TriNet via a toll-free call center, rather than an administrative contact. This not only drastically reduced the time Synergenics needed to devote to the vendor relationship, but it saved the HR manager for Synergenics time personally because employees wouldn t come to her with routine payroll and benefits questions. Synergenics looked at two of TriNet s competitors as well, but they both priced their services via a percentage of employee payroll and put ancillary fees on top of that. It was difficult to understand the full cost of doing business with them. TriNet, in contrast, offered a flat fee that allowed Synergenics to crunch the numbers and do a comprehensive, cost-benefit analysis. What Synergenics Recommends? Susan Vandergrift, VP of Finance for Synergenics, says, Look at the HR provider s fees, examine your company s demographics, and examine the internal cost of managing HR on your own. See if integrated HR makes sense from this standpoint. If your prospective provider s fee structure isn t easily understood, that should be a red flag right there. She continues, If you have an employee population that doesn t necessarily need benefits such as disability and life insurance, then you may not need integrated HR. But if you run a business that requires a mature workforce, benefits such as costeffective health insurance, disability and life insurance become important factors. This is particularly true if you want to attract and retain the talent. 5

35 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Many VC-backed companies were already using TriNet, meaning that TriNet understood our space and could resolve our issues better than its competition. That was a big positive for us. Gary Swart CEO odesk Case Study: odesk The Background The odesk value proposition is a powerful one: the company enables customers to hire, manage, and pay world-class technical talent at globally competitive rates, equipping business leaders with the ability to contract for on-demand technical talent rather than permanently hire an in-house IT staff. The Challenge As odesk s CEO, Gary Swart, explains, We re a lean, 20-person team; we simply have no time to manage HR. We were small enough that the benefits we had weren t the quality we needed to attract a high caliber of talent. We started looking for a better way. The Alternatives Initially, Swart dealt with his human resource challenges by using a multi-vendor arrangement more than seven different companies. This proved challenging on a number of levels, especially since odesk has to perform HR for multi-state employees. 6

36 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Why They Chose TriNet After evaluating several options, odesk s team selected TriNet. We were convinced quickly that TriNet was the right option. Many VC-backed companies were already using TriNet, says Swart, Meaning that TriNet understood our space and could resolve our issues better than its competition. That was a big positive for us. Also, we did our due diligence from a cost, quality, and customer service standpoint, and TriNet definitely made the grade. It s useful to access and manage our own HR data and perform transactions online. We also have better benefits, and from all I ve heard, very satisfied and content employees who are beneficiaries of TriNet services. Swart continues, Now that we re established with TriNet, I ve found both the value drivers that I wanted as well as a few additional ones. What odesk Recommends Gary Swart concludes, HR is simply not core to odesk s business. I do not want to deal with employee benefits or workforce administration, but rather pursue my business passions. TriNet helps me focus on those drivers, and that means TriNet is a valuable asset for both me and my employees. 7

37 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies TriNet meets the same need for Socket that they did in 1992: providing first-class HR support that allows us to focus on developing our products and growing the business. David Dunlap CFO Socket Mobile, Inc. Case Study: Socket Mobile, Inc. The Background Making connection products and data collection products for handheld computers and other devices may be a hot business now, but Socket Mobile is a Grand Old Master in the field. Founded in 1992, the company created the very first Ethernet card and now enjoys a leadership position in wireless communications. Starting in 1999, it combined laser bar code scanning with handheld computers to create a truly mobile bar code scanning experience. Its linear and 2D barcode scanners today work with a wide variety of mobile computing devices including handheld computers, smartphones, and tablets. The Challenge Although Socket employs some HR professionals, and David Dunlap, CFO of Socket Mobile, has an HR background himself, Socket was looking for a complete HR solution and an outsourcing relationship. Socket didn t want to expand its in-house HR infrastructure or purchase a Human Resources Information System, yet wanted to gain enterprise-level resources for empowering its employees. The Alternatives David Dunlap says, We still get unsolicited requests from other HR vendors, but from our standpoint, TriNet continues to provide the best value. We ve been pleased for a long period of time. After more than 20 years of partnership with TriNet, Socket Mobile is happy with its choice of HR partner. 8

38 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Why They Chose TriNet Socket s tech-savvy employees appreciate secure, cloud-based TriNet self- service. Dunlap says, The TriNet portal allowed 100% of our employees to choose their benefits online during our recent Open Enrollment. Choosing benefits can be a complicated process, and my employees are the first to let me know when they re not happy. But there were no complaints in fact, we heard a number of compliments. Dunlap continues, The TriNet customer portal is easy to use. Employees can sign up for benefits, access their HR information, and make changes in real time. What Socket Mobile Recommends The Socket Mobile management team continues to appreciate the savings, in terms of both time and money, that TriNet is able to secure for them. The negotiating power of TriNet makes benefit packages very cost effective, and their services are easy to understand and use from the customer side. Says Dunlap, TriNet is an important partner when we require the insight of specialists. They give us guidance on everything from 401(k) providers to employee ergonomics to workers compensation. They have a very personable and responsive team. And they treat our employees like members of their own company. 9

39 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Conclusions Why Bundled HR? Bundled HR covers the entire range of payroll, benefits, and human resources functions. It should also deliver a range of online self-service, as well as administrative support and a call center. This approach may be optimum for your company if: You have a skilled talent pool that expects a premium benefits package, which your company may have difficulty procuring on its own. Your staff needs to retain focus on the company s core competency. Your HR needs mandate having a full-service solution, rather than simply payroll or benefits. Your employee salary and benefits structure indicate that outsourcing might save you money. Your employees have access to the Internet and can leverage cloud-based services. You have needs in regards to the HR function that include employer-related compliance. You require an outsourcing provider who can help you attract and retain top talent. 10

40 Why They Chose Integrated HR Outsourcing: A Look at Three Small Companies Recommendations for Due Diligence Points to consider when evaluating HR providers: Does the cost of the provider s services lead to other time and cost savings, such as reduced administrative staff, decreased employee oversight, and beneficial rates on health care and workers compensation? Does the provider have customers willing to provide references? Is the provider s fee structure easy to understand, enabling a cost analysis of outsourcing fees versus in-house investment? Does the provider leverage Internet delivery for time and cost savings? Does the provider offer a call center for employee questions? What is the provider s set-up process? How fast can it be completed? Your Next Step: Consider your Internal Costs Before contacting an HR provider, you should map out the current cost structure for your company s human resources. Remember to consider the full time and cost of your HR function, including staff oversight as well as time and energy devoted to each process. 11

41 About TriNet TriNet serves as a trusted HR partner to small businesses to help contain costs, minimize employer-related risks, relieve administrative burden, and keep focus on core business functions. From routine employee benefits service and payroll processing to high-level human capital consulting, TriNet s PEO expertise is integrated with every facet of a client s organization. Its solutions specialize in serving fast-moving companies in fields such as technology and professional services, who recognize that top-quality employees are the most critical competitive asset. For more information, visit TriNet.com Disclaimer The contents of this white paper have been prepared for educational and information purposes only. The content does not provide legal advice or legal opinions on any specific matters. Transmission of this information is not intended to create, and receipt does not constitute, a lawyer-client relationship between TriNet, the author(s), or the publishers and you. You should not act or refrain from acting on any legal matter based on the content without seeking professional counsel TriNet. All rights reserved. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. Feb a QLfkw Learn more at TriNet.com or call Ambitions Realized