What Makes a Successful Human Resource Department?

In today's hyper-competitive business environment in which profits are scarce and you are forced to do more with less, whether you succeed or, indeed, even survive, is dependent on how you manage the resources at your disposal such as materials,  vendors, suppliers, distributors.  And, of course, personnel.  Human capital management is critical to your operational and financial success.    Human Resources.  Two simple words.  One very complex concept.  Personnel.  People you pay to work for you so that the company can make money (and they can continue to get paid!).   If that's all there was to it, you wouldn't be reading this.  But you know there is so much more.  Recruiting. Pre-employment screening.  Interviewing.  Reference checks.  Hiring.  Onboarding.  Training.  Timekeeping.  Record keeping.  Regulatory compliance.  Statutory compliance.  Payroll.  Payroll taxes.  Wage and hour complaints.  Benefits.  Insurance.  Health care.  Absenteeism.  Workers compensation.  Vacation requests.  Employee conflict.  Performance issues.  Disciplinary action.  Termination.  Unemployment  claims.  Employment-based litigation.     

Successfully navigating the H.R. landscape requires focus, specific experience, specialized training and fluency in the language of employment law.  Many small business owners address this need in-house.  Unfortunately, many of these same companies can't afford a human resources professional, much less an H.R. department.  Human Resources departments are seen as a necessary evil, a cost center rather than a profit center.  And small companies rarely devote significant energy and expense to cost centers.  However, mismanaging your human resources can result in significant, if not crippling, costs, endangering your very financial survival.   

So, what makes a successful Human Resources department?

Why can't you just have your A/P Manager, your bookkeeper, your accountant, office manager or, heaven forbid, even you yourself handle the H.R. function?  Simple answer?  Why would you?  The complexity of employment law and personnel matters, combined with the potential costs associated with, for example, statutory non-compliance or discrimination/wrongful termination claims, compels you to prioritize this function.  A highly successful, efficient and cost-effective way to deal with your H.R. challenges is to employ the services of a professional employer organization. 

A professional employer organization, otherwise known as a PEO, provides you with all of the competencies, attributes, and resources you need to managing your personnel matters without the necessity of managing the manager.  Once known as employee leasing, the co-employment arrangement that you enter into with a professional employer organization will shift the burden from your in-house staff (or you!) to "professionals", people who specialize in carrying out mission critical H.R. tasks such as:  

  • Hiring more qualified employees because they have the time and a much greater talent pool from which to draw 
  • Monitor and attend to compliance (e.g., payroll, EEOC, OSHA, etc.)   
  • Administer all documentation associated with human resources (e.g., applications, new hire information, I-9 employee verification, personnel files, benefit enrollment, etc.) 
  • Manage claims management represent you in appellate matters related to those claims (e.g., wage and hour, EEOC, workers' compensation and unemployment insurance benefits) 
  • Provide more comprehensive benefit choices based on a larger employee pool  
  • Create, implement and administer all personnel performance functions, including training, employee handbooks, disciplinary action,etc. 
  • Enhance employee-employer communication 
  • Manage personnel issues and disciplinary action to minimize potential liability. 

These are but some of the ways in which a professional employer organization can manage your human resources.  With a degree of professionalism, attention to detail and focus that you, as a small businessman, couldn't hope to be able to afford, much less maintain, if you were to attempt to carry out all the requisite duties, responsibilities and tasks in-house.   

So, what makes a successful human resources department?  A professional employer organization.   One that manages your human resources outsourcing, enabling you to manage the business of running your business.     

About the Author
Carolyn Stoll Sokol is a frequent contributor to PEOcompare and writes about issues that may affect small businesses.  She is a founder of PEOcompare.com which helps match small businesses with PEOs for their particular needs.  Her background is in marketing and communications, employee education and training, development of policies and procedures and the ongoing delivery of outstanding service to customers.
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