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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