As the business world grows and changes, small and mid-sized businesses are increasingly reaching outside their own walls for help. When it comes to human resources, this means outsourcing HR needs and delegating human resources tasks to an external provider.
The benefits of this approach are numerous. Outsourcing HR allows businesses to streamline operations, access specialized expertise, and free up time and energy to focus on core activities within the business. Boasting years of experience and a track record of delivering exceptional HR solutions, Aspen HR stands out in this new landscape of outsourced HR. Offering everything from payroll to compliance, our white-glove approach to HR solutions is second to none.
The Growing Trend of HR Outsourcing
Recent studies highlight a surge in HR outsourcing, especially among modern businesses. In fact, employment in the PEO industry has grown 16x faster than the U.S economy since 2013. And according to the National Association of Professional Employer Organizations (NAPEO), PEOs provide services to nearly 175,000 businesses, employing around four million people.
Industry revenue for PEOs in the United States is estimated to be a whopping $254 billion, and this trend isn’t just a fleeting phase; it’s driven by a litany of tangible, real-world benefits companies experience when they outsource HR. Factors such as cost savings, access to expertise, and the ability to stay compliant with ever-evolving regulations are driving this demand, which doesn’t show signs of abating any time soon.
The Top 10 Benefits of HR Outsourcing
1) Cost Efficiency
Outsourcing HR can lead to significant savings, for several reasons. First, instead of maintaining an in-house HR team and infrastructure, businesses can tap into the expertise of seasoned professionals without paying costly overhead. Additionally, PEOs offer massive savings on employee benefits plans, often leveraging their significant scale to deliver Fortune-500-level benefit offerings to much smaller businesses. And finally, a good PEO helps you avoid costly penalties due to compliance failures.
This is why the average ROI on partnering with a PEO can be substantial, securing average cost savings of 27.3%. At Aspen HR, we’ve consistently delivered cost-effective solutions across a wide variety of industries, allowing companies to allocate resources more efficiently. For example, while recently upgrading the benefit offering at a small fintech company, we were able to deliver over $370k in annual savings.
2) Access to Expertise
Navigating HR in the modern business landscape means dealing with everything from employment laws & regulations to employee-related matters. Those are all areas where smaller companies can benefit immensely from the tried-and-true expertise of HR professionals. Outsourcing means having a team of dedicated HR experts at your disposal, whose wisdom can both guide your business toward positive outcomes and help you avoid negative ones.
Aspen HR boasts a team of professionals well-versed in the latest HR practices, ensuring that our clients receive top-notch services. With extensive experience and access to cutting-edge software solutions – that can be prohibitively expensive for a company to operate in-house – Aspen HR allows our clients access to outsized HR resources that allow them to focus on running their core business.
As your business grows, so do your HR needs. After all, running payroll and benefits as a small startup is vastly different from doing so with dozens (much less hundreds) of employees. Outsourcing HR allows you to scale operations seamlessly, by leveraging the significant resources of a professional employer organization.
Aspen HR has been instrumental in aiding businesses through various growth phases, ensuring that HR operations evolve in tandem with business expansion. For example, when a private equity client needed HR coverage for a recent acquisition, our team was able to provide exactly what they needed, establishing a foundation for complete HR functionality within just 6 days.
4) Risk Management
Staying compliant is crucial in today’s business world, and it’s becoming more complicated than ever. As labor laws continue to change and evolve at an increasingly-rapid pace, most small or mid-sized businesses struggle to keep up. Outsourcing HR can help companies navigate the maze of HR-related regulations, reducing potential risks and preventing the sting of non-compliance penalties.
Aspen HR prioritizes compliance, ensuring businesses operate within legal boundaries across different states. Whether it’s keeping up with the rapidly changing compliance landscape throughout the country or handling due diligence, our clients depend on us to minimize and manage potential risks.
5) Technology Access
Modern HR operations are powered by cutting-edge technologies. However, these solutions can be complicated to operate and expensive to run or train personnel on, making their use prohibitively difficult. By outsourcing, companies can leverage these technologies without the hefty investment. Aspen HR offers state-of-the-art software solutions like Aspen Cloud, ensuring businesses stay ahead of the curve.
While essential, HR tasks can be incredibly time-consuming. Whether it’s recruiting, hiring and onboarding, compliance issues, payroll processing, or any of the many other essential duties required to run a company, human resources represents a significant investment of time that could otherwise be spent on your business’s core activities.
When you outsource HR functions to a PEO, you free up that time to focus on other priorities. Many Aspen HR clients have attested to the time savings and efficiency gains they’ve experienced. In fact, simply outsourcing payroll duties alone can save significant amounts of both time and money.
7) Enhanced Employee Benefits
Today’s business world is more competitive than ever, and companies cannot afford to lose out on top talent by offering sub-par benefits packages. This is where PEOs can more than earn their keep, providing enterprise-level benefits offerings to smaller companies who normally couldn’t access them (often at competitive rates). Whether it’s health insurance, 401(k) retirement plans, or health savings accounts (HSAs), the competitive benefits secured by a good PEO can help a company both attract and retain top talent, boosting the bottom line over time.
Aspen HR, for example, offers Fortune 100-level benefit packages, ensuring businesses can tailor their benefits offerings to their specific needs. We were able to save a financial services client, who had previously resorted to buying costly individual life insurance plans for each employee, nearly $100k (and significant underwriting time), by finding them group and voluntary life insurance plans that exceeded their previous payout level.
8) Streamlined Processes
Every modern business can benefit from increased efficiency. Unfortunately, HR tasks and systems often aren’t that efficient. Compliance management and payroll processes can be unnecessarily complicated, costing employees time and effort.
Outsourced HR operations are often more streamlined, offering greater efficiency and simplification within HR systems. They’re also handled by experts who ensure that even the most mundane tasks (no matter the paperwork) are completed promptly and accurately. Aspen HR’s systematic approach to HR tasks ensures that our clients’ businesses operate like well-oiled machines.
9) Focus on Core Business Activities
A business’s success is often tied directly to the amount of time and effort its top employees are able to spend on its top priorities (or core business drivers). Outsourcing HR helps increase that time, allowing a company to zero in on what it does best.
With HR tasks in capable hands, companies can channel energy and resources into their core operations. Numerous Aspen HR clients have thrived by partnering with us, achieving significant growth and success.
10) Customized Solutions
Every business is unique, and so are its HR needs. In fact, an HR solution that’s considered boilerplate in one industry may not translate at all to another. When you outsource HR, you get a tailored HR solution that aligns with your specific business objectives and the intricacies of your industry, such as specific regulatory practices that might affect compliance.
Aspen HR is renowned for crafting bespoke HR strategies, ensuring each client’s unique needs are met. For example, our clients in the fintech industry have repeatedly benefited from our deep industry expertise, allowing them to focus on core objectives while enjoying streamlined HR expertise and enhanced compliance.
Transform Your Business with Aspen HR Outsourcing
HR outsourcing offers a plethora of benefits, from cost savings and better risk management, to enhanced efficiency and improved compliance. With our considerable expertise and unmatched commitment to excellence, Aspen HR is perfectly poised to deliver all of these benefits and more. If you’re looking to transform your own business by partnering with a PEO, contact us today.