How You Can Strengthen Your Company Culture By Outsourcing Your HR

Posted by Elia Hagen on February 28, 2020 at 10:00 AM

How You Can Strengthen Your Company Culture By Outsourcing Your HR-1

By 2023, 35% of employees will be leaving their jobs each year for another place of employment. Serious retention efforts are needed and that starts with strengthening your company’s culture. 

Providing an engaging culture which appreciates the individuality of employees is key to employee retention. Failing to do so leads to higher turnover and remains one of the most cited reasons for employees quitting. In fact, disengaged employees are 87% more likely to leave their job. 

Beyond retention, potential hires also care about company culture, making it essential for attracting top talent.

What is company culture?

A company culture defines how employees see themselves in relation to one another and their employers. It is the “personality” which captures why someone would love working at a company. Specifically, it is the traditions, customs, and behavioral ideas which permeate the workplace. 

Company culture takes into account how employees are treated both emotionally and in terms of salary and benefits. A lackluster benefits package increases turnover and makes it harder to build lasting relationships between employees.

What may come as a surprise is that company culture can be strengthened through outsourcing Human Resources (HR) functions. There are several reasons for this.

Less Administrative Burden

An ideal HR division spends its time maintaining an engaged workforce through creative initiatives. This has the added benefit of keeping HR employees engaged in their own jobs. 

However, the reality is that much of HR’s time is spent fielding difficult questions regarding payroll or benefits administration or trying to get a response from an insurance carrier. 

An outsourcing HR partner adds a layer of support to handle these and other tasks which stymie the abilities of your HR department to flourish.

With administrative burden relieved, HR can focus on strategically impactful initiatives that strengthen employee engagement and company culture. As these initiatives succeed or fail, company culture slowly becomes optimized as improvements accumulate. Even when a company culture has been fully optimized, HR employees are needed to ensure that the company can maintain that standard of excellence.

Better Benefits

When companies use HR outsourcing partners known as “Professional Employer Organizations” (PEOs) they gain access to benefits plans that are more comprehensive and, in many cases, less expensive than what would be possible without a PEO.

This is thanks to a co-employment agreement which lets your business share HR-related responsibilities with the PEO. Specifically, co-employment agreements make the PEO the Employer of Record for payroll and tax purposes. 

In this way, the PEO can offer unique solutions for medical insurance.  The PEO may be able to grant your company access to a large group “master” medical program that covers thousands of members.  They may also serve as an insurance broker, bringing you ideas for both fully insured small group plans and innovative self-insured possibilities.  The PEO brings both the scale and skills needed to offer more cost-effective, creative options for medical insurance and benefits. 

Without this advantage, offering the best benefits may be cost prohibitive for your company. Competitors with HR outsourcing partners can offer the same benefits at a lower cost or better benefits at the same or similar cost. 

Enhanced Company Culture

The idea of outsourcing HR to strengthen a company culture is not intuitive, but decades of experience proves its success. In fact, small businesses with HR outsourcing partners grow 7% to 9% faster than businesses that do not outsource any HR functions.

 When your HR partner is a Professional Employer Organization, your business gains access to better benefits at a lower cost than would otherwise be possible. This decreases turnover and further strengthens company culture by allowing employees to build long-term relationships with one another.

With a solid company culture partnered with the right HR outsourcing provider, like Questco, your company does not need to worry about being caught in the turnover trends whether it is 2023 or beyond.

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ABOUT THE AUTHOR:

Elia Hagen

Topics: Employee Benefits, Outsourcing HR / PEO, Employee Engagement

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Here, you'll find educational resources, best practices, and business tips created for business owners and leaders. We cover topics including human resources management, PEO, compliance, risk management, staffing, and more. Learn more about Questco here.

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