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Outsourcing HR in a Hybrid Work Environment - Part II

Outsourcing HR in a Hybrid Work Environment P2

In Part I of this two-part blog on outsourcing HR in a hybrid work environment, we focused on what activities to outsource and why. In Part II, we now focus on what functions to keep in-house and the benefits.

A key component of a strong Talent Management Program is talent development. And that’s what gets sacrificed when institutions keep their entire HR operations in-house. As I shared in Part I, when I was the Director of HR, administrative tasks such as payroll and benefits administration consumed most of my time. I couldn’t do my favorite part of Human Resources which is to develop the talent we had. Part of the development includes some of the activities we recommend handling in-house.

Below is a list of activities that you can (and should) keep in-house:

  • The “people side” of the hiring process: Someone in HR reviews the resumes to screen candidates. Then the hiring manager along with the HR representative interview the top candidates. For senior executive positions, typically the president/CEO of the institution and the senior leadership team conduct the interviews either in-person or via a video call. You must always check the references provided. Lastly, follow up after interviewing as a best practice. We recommend deploying automated systems around the hiring process, such as human assisted, but automated resume reviews, candidate tracking and emailing thank you letters or next steps, so candidates know what to expect. There are many quality applicant tracking systems out there so it is hard to make a recommendation on this one. However, we always recommend pairing your tracking system with the applicant screening system from Wonderlic.
  • Establish a career path: The performance review process is one of the best times to discover your employees’ aspirations for future career growth. The manager can then coach the employees on how to get there. The leadership team provides growth opportunities and needs to work with HR on a path based on the jobs the employee is interested in.
  • Establish a mentoring program: Most small community financial institutions do not have a mentoring program in place (formal or informal) and don’t know where to start. One of the best places to start is by making it part of your succession planning process. Many community financial institutions are experiencing turnover due to “legacy employees” retiring. This is the perfect opportunity to pair up the retiring employee to mentor the successor. Establishing a successful succession plan takes time and resources as well as careful thought process. Communication is key for all parties involved.
  • Develop a personal development plan: In addition to a career path, employees need to develop personally as well. What does this entail? Developing the soft skills which includes leadership talent and management skills training, negotiation skills, time management, presentation skills, and presence. Managers work with HR to develop personalized development plans for your employees. Talk about a retention strategy!
  • Provide internal (or outsourced) emerging leader training and leadership development for established leaders: Your institution can choose to create an internal plan but there are plenty of leadership institutes to send your emerging leaders to. Don’t forget to also continue to develop your seasoned leaders. Their needs are different, and they may be looking for different types of development such as networking with peers in the industry to stay on top of their fields.
  • Culture: Lastly, do not delegate but instead, own the culture training for your institution and intentionally select ways to maintain it - even with remote staff. You need to preserve your culture as your organization grows to ensure your employees do everything “your institution’s way.” In the end, it’s all about how you treat your employees who in turn work with your customers! Preserving your culture is how you retain top talent and top customers too. Don't know how to define culture? Maybe start with your core values. We recommend reading the book The Core Value Equation by Darius Mirshahzadeh for help in documenting and shaping your core values.

As you can see, when you Centralize your HR outsourcing to one main third-party service provider and outsource HR administrative tasks, your HR team has time to focus on attracting, retaining, and developing your talent.

Outsourcing HR in a Hybrid Work Environment - Part 1

Outsourcing HR in a Hybrid Work Environment

A recent topic our client base is asking about lately concerns outsourcing HR in a hybrid work environment. The question of “should we outsource HR”? may be discussed in your strategic planning sessions also. Community financial institutions should focus on what they do best—banking and banking products. However, institutions also need to focus on attracting, retaining, and developing top talent in a hybrid work environment and that requires an investment of time, systems, and resources. In Part I of this two-part blog, we'll focus on what activities to outsource and why. We will then focus on what HR functions to keep in-house in Part II.

Even though the institution where I was Director of HR outsourced several of the administrative tasks to various vendors, I still spent considerable time managing the vendors and logging in to multiple sites. This is a common challenge for HR professionals in institutions across the nation. Instead, I should have spent time on the “people side” of HR. The answer? Centralized outsourcing! Notice it’s not only about simply outsourcing but to centralize it with one vendor that can do most or all the administrative tasks while keeping the people side of HR in-house. With COVID-19 and the global trend of allowing staff to work from home all or most of the time, outsourcing the administrative part of HR is making more and more sense.

Reasons to Outsource:

  • Your HR staff only has time to do the administrative tasks.
  • There is no time to develop a formal Talent Management Program.
  • You need to digitize and automate employee onboarding processes for both local and staff who may never make it to the office.
  • You want all HR documents in one central system.
  • Employees want electronic access to their personal information such as paystubs, W-2, health insurance information and setup/changes to dependents, timecards, etc.
  • Your institution wishes to automate applicant tracking to simplify the hiring process.
  • Your institution needs a Learning Management System (LMS) to expand the availability of learning tools to local and remote workers.
  • Your HR staff needs legal counsel on employee matters such as employment contract review, and legal counsel on terminations, etc.
  • Your HR staff logs into multiple vendor sites and systems are not integrated.

Below is a list of activities that your institution can outsource:

Payroll Processing: Most community banks and credit unions are already outsourcing this key function. However, the system they are using is not integrated to anything else which creates a challenge for HR staff.

Timekeeping Software: Most institutions transitioned to automated timekeeping software. However, we still hear about institutions that have an internal manual time tracking system or the timekeeping software does not talk to the payroll system.

Recruitment Process: Even though it is crucial for the institution staff to interview candidates, you can outsource and automate the recruitment “process.”

Performance Evaluation Process: Ideally, you can automate and streamline the performance review process to eliminate manual forms and store all employee records in one central repository system.

Workers’ Compensation Insurance: HR vendors typically can provide better rates for Workers’ Compensation Insurance so you may want to check that out too.

Onboarding: Once your new employees are officially hired, then the onboarding process begins. This process can be cumbersome for the new employees if it’s not automated and if they must complete forms manually, let alone if they are remote. It is best to outsource the complete administrative onboarding process and focus on welcoming them to the team.

Training Tracking: Many institutions still track employee training in spreadsheets which is time consuming and difficult to maintain. Instead, outsource this task and allow employees to enter their own training or ensure the system tracks automatically based on employee logon information.

Benefits and 401K Administration: Managing the enrollment process for the health insurance benefits and retirement plans is time consuming. Even though you may have a third-party provider, you still have to collect all the forms and submit them, conduct informational meetings, and send multiple reminders to employees to sign up by the deadline. You can automate and streamline this entire process by outsourcing to a vendor platform that integrates to the payroll, timekeeping, and onboarding platforms. Remember the goal is to have centralized outsourcing!

One great company that helps you with your outsourcing needs is AssetHR. We know them and hear excellent testimonials about their services. They become an extension of your HR department. Another company that helps centralize your 401K administration is Fringe Benefits Design. We also know them and they help you with the three key aspects of 401K management: 1) Investment Performance; 2) Service Provider Fees; and 3) Quality of Service.

We hope this provided you with ideas on what activities to outsource and why. We'll discuss what functions to keep in-house and why in Part II of this two-part blog.

 

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Books by Marcia Malzahn