Why Millennial-Run Companies Trust HR Outsourcing

The millennial generation is on track to be the most diverse generation of professional adults in history. By 2025, millennials are expected to comprise 75% of the workforce. Millennials and their Gen Z counterparts are more likely to start their own businesses and take control over their livelihoods. They are also looking to take professional leadership responsibilities earlier than both Baby Boomers or Gen Xers.

Business is changing – and millennials are leading the charge when it comes to this shift. Let’s take a look at how these changes are playing out and why millennials are more likely to turn to HR outsourcing.

Changes in the Business Landscape

As millennials take top positions in businesses of all sizes, they provide a glimpse into how they will lead industries into the future. More so than previous generations, millennials care about their co-workers' needs and well-being. They understand the pressures and challenges young talent faces because they face similar challenges in their own careers. Millennial business leaders also know how important it is to retain young talent and how a positive work culture improves the quality of life for every employee.  

The millennial way of doing business is to find creative methods to provide workplace flexibility, helping employees maintain their work-life balance. In doing so, they engage employees while encouraging productivity and loyalty. In practice, this can take many different forms including:  

• Allowing all employees to participate in the company's vision and strategy development 
• Offering flexibility in how they do their work
• Celebrating milestones 

• Providing distinctive and comprehensive benefits (such as health insurance, discount programs, and pet insurance) 
• Putting more trust in their employees 

Each manager or CEO must find the best ways to motivate their specific team. Motivated teams are actively engaged and interested in the company’s well-being. When needs are not being met within the organization, employees are much more likely to leave their current job for a position in another company.  

How Millennial Leaders Address Shifting Needs  

The millennial approach to business is admirable, and it is also ambitious. Building a workplace that engages employees can be difficult, especially when companies must do so many other things to build their business.  

Improved Benefits 

Benefits present a particularly interesting challenge for leaders to overcome. Most employees believe that a robust set of benefits are essential. They want a workplace that provides: 

• Health insurance 
• Paid time off 
• Awards and recognition 
• Bonuses 
• Meal breaks 

While you can provide some of these benefits with little incremental cost, many businesses struggle to find a way to foot the expensive bills for must-have items like healthcare coverage. It can be cost-prohibitive, and paying for a reasonable share of these costs is very difficult. Fortunately, there is a practical way to clear this hurdle.  

Working with an HR Partner

Finding an HR partner allows the business to outsource some HR tasks and responsibilities. Their HR partner streamlines the company’s HR functions, creating a more seamless process and freeing up your internal team’s time to focus on strategy and engage your staff.

Here are some of the critical ways your HR partner can help.

Comprehensive and Affordable Health Insurance  

HR outsourcers have more leverage and expertise to negotiate with insurance companies on your company's behalf to provide benefits plans and administer them for your employees. They also provide this same service to other companies, allowing them to bring thousands of employees to the negotiating table. This results in lower insurance costs for your employees and a happier and healthier workplace. 

Satisfied and Supported Employees 

More so than other generations, many millennials do not feel fulfilled in their positions if a large portion of the workday is dominated by busy work. They want to use their creativity and talent to innovate rather than file papers, fill out forms, or input data. Outsourcing some of your company's HR responsibilities can free your HR employees to work on projects that benefit both the company and satisfy them intellectually.

The time that HR staff gets back from streamlined tasks empowers them to think more strategically or work one-on-one with their staff. In turn, employees in other departments will feel more supported and in their roles when they need anything.

Flexibility and Support in Your Business

HR outsourcers provide companies with critical support and empower them to achieve more beyond their size, whether it’s providing better benefits or optimizing remote work functions to operate a team spread across the country. The guidance they can get allows companies to maintain compliance without upper management or the business owner spending countless hours trying to keep up to date with changing HR regulations.

Millennial business owners are more likely to want to focus on their key tasks, and putting their trust in an HR outsourcer lets them do so, knowing they’re in safe hands. They can gain flexibility and security in running their business, supporting their staff, and face fewer risks of non-compliance.

Efficient HR Technology 

Millennials have grown up in a world where technology has progressed at a rapid speed. Theirs is a generation that expects high sophistication, efficiency, and automation. A quality HR outsourcing partner can provide your employees with an efficient, self-service technology stack that is mobile-friendly. They can help businesses do the following:  

• Streamline payroll processing 
• Analyze data and generate reports 
• Manage demographics and tax information 

This technology will benefit your employees and give your business the opportunity to handle the challenges that growing companies face.  

What Does the Data Say? 

Available data shows that with an HR partner, businesses gain more than would otherwise be possible. NAPEO released a study that states: 

• Companies that partner with HR outsourcers grow 7-9% faster  
• HR outsourcers have an ROI of 27.3% 
• Enables small business employees to access health benefits at a lower cost than would otherwise be possible. 

What do Millennials Say? 

As a group, millennials are more likely than older generations to embrace new ideas that have the potential for big rewards. They also expect employers to take care of their employees. For these reasons and many more, millennials are more likely to embrace an HR outsourcing partner as a way to reduce costs and free talent to focus on the business rather than on administrative tasks.