What are HR services? Definitions, examples, and tips.
From an employee’s first day with a company to their last, human resources teams are responsible for overseeing the entire employee lifecycle. Recognizing that HR teams shouldn’t handle this burden alone, many organizations turn to third-party partners to outsource various HR services, including payroll, benefits administration, compliance management, and more.
What Are HR Services?
HR services are activities and functions that help businesses effectively manage their workforces. They cover the entire employee lifecycle and collectively contribute to a positive work environment by:
- Maintaining organizational safety and compliance
- Fostering employee productivity, satisfaction, and engagement
- Aligning an organization’s workforce with its goals and values
- Driving efficiency and productivity
These functions not only protect your business, but they also help build a workplace that engages employees and puts your people at the heart of everything you do.
Why Do Some Businesses Outsource HR Services?
While HR services are crucial to business success, not every business has the time, resources, and expertise necessary to oversee every service in-house. To still offer these services, many companies choose to outsource specific functions to two types of vendors:
- Third-Party HR Consultants: Professionals or organizations that provide expert advice and services to optimize workforce strategies.
- Professional Employer Organizations (PEOs): Third-party entities that provide comprehensive HR outsourcing services to businesses.
Companies of any size may choose to partner with an HR consultant or PEO. For example, a growing start-up might turn to a PEO to get its HR programs off the ground or build a more competitive benefits package for its employees. In contrast, an established enterprise company might lean on an HR consultant to help scale its programs or leverage their specialized knowledge.
The biggest benefit of outsourcing? Efficient HR processing services companies can handle day-to-day operations and administrative tasks (like payroll, benefits administration, or compliance management), giving internal HR teams more time to focus on strategic initiatives. This partnership frees up businesses from the intricacies of HR management and empowers them to concentrate on other areas of the business, like growth, hiring, and engagement.
Examples of Key HR Services
HR services encompass any task related to human resources — and there are many! From handling routine HR tasks to navigating complex compliance requirements, here’s an extensive look at some of the most common HR service offerings:
- Recruitment: Finding the right people for the job involves posting jobs, screening resumes, interviewing candidates, extending offers, and onboarding new hires.
- Onboarding: A strong new hire orientation program helps new employees feel welcome and get up to speed quickly, sparing them from a pile of paperwork and allowing them to dive right into their roles.
- Benefits Administration: Managing and overseeing employee benefits like health insurance, retirement plans, and other perks is crucial. This includes building a competitive benefits package, communicating offerings, overseeing open enrollment, assisting with inquiries, and staying abreast of regulatory changes.
- Payroll Processing: Ensuring employees get paid accurately and on time is complex. Outsourcing payroll can handle complex compensation models, benefits deductions, wage garnishments, and payroll taxes.
- Compliance: Adhering to labor laws and regulations is critical to avoid costly penalties. HR compliance service providers can alert you to new or changing legislation, offer robust self-serve resources, and provide dedicated support for specific compliance questions.
- Performance Management: Establishing goal-setting, training managers and employees on feedback, and organizing performance reviews help evaluate employee performance, identify growth areas, and show investment in employees’ careers.
- Learning and Development: Investing in employees’ skills and growth through mentorship programs, job shadowing, classroom learning, stretch projects, and creating development plans.
- Employee Engagement: Conducting regular surveys to evaluate business practices and identify improvement areas helps build a better workplace and keep employees happy and healthy.
What HR Services Are Typically Outsourced?
While almost every HR service can be outsourced, businesses typically seek extra help with:
- Payroll Processing: Ensuring paycheck deductions are correct, employee payments are accurate and on time, payroll taxes are paid, and tax filing deadlines are met.
- Benefits Administration: Negotiating competitive benefits packages, handling employee enrollment and queries, and navigating Affordable Care Act requirements and filings.
- Risk Management and Compliance: Following local, state, and federal labor laws, handling record keeping, report filing, audits, workplace safety programs, and training programs.
- Employee Onboarding: Facilities and technologies for candidate drug screenings and background checks.
- HR Strategy: Leveraging specialized expertise, improving efficiency, and strategically allocating business resources.
How HCM Software Can Help Streamline HR Services
Although PEOs and HR consultants offer time-saving benefits, they have one big catch: they require your business to relinquish control over your HR processes. This might not be an issue for some smaller organizations, but there may come a time when you want more control over your HR operations and visibility into your people and workplace data.
Cost could also be a deciding factor. Outsourcing can be expensive, so your business might find it a better investment to hire additional headcount to oversee these responsibilities in-house.
Whatever your reasoning, transitioning off a PEO or deciding not to use consultants can greatly benefit your business. But what are the alternatives? Comprehensive HR solutions like human capital management (HCM) platforms give organizations greater control over their HR initiatives and overall employee experience.
An HCM solution allows businesses to bring all their HR services in-house. It offers tools and features that help automate tasks, streamline processes, and drive efficiency. This solution efficiently manages personnel data, handles robust payroll tasks, optimizes scheduling efficiency, and helps attract, nurture, and grow your employees — all in one centralized system.
Benefits of Using an HCM Platform for Cloud-Based HR Services
Here are a few benefits of using HCM software instead of a PEO or consultant:
- Streamlined HR Workflows: Cloud-based software consolidates people data and leverages automation to streamline processes. Time and attendance data can seamlessly flow into your payroll tool, helping you pay employees accurately and on time.
- Better, Data-Driven Decisions: With all your people’s data in one place, you gain visibility into your workforce and business initiatives. These insights help make strategic decisions to optimize productivity, drive better performance, and invest in your people.
- Cost Effectiveness: PEOs typically charge a percentage of payroll or a fixed fee per employee, which can become costly as an organization grows. HCM platforms often offer scalable pricing models that allow for more predictable costs and potentially lower expenses. They also help reduce reliance on external service providers and their associated fees.
- Access to Specialized Expertise: HCM software companies offer dedicated subject matter experts to answer pressing questions, provide best practices, and help you get the most out of their platform and your workforce.
- Access to the Latest Technology: HCM solutions are constantly innovated to help customers get the most out of the platforms. Partnering with an HCM solutions company often provides access to easy-to-use technology, self-service mobile applications, and advanced tools like artificial intelligence.
How UKG’s Comprehensive HR Solutions Suite Can Help Your Business Succeed
If you’re looking to improve the efficiency of your organization’s HR services, you’ll need a cloud-based HR services solution like human capital management. Luckily, UKG has you covered. Our comprehensive HR solutions suite has everything enterprise businesses need to serve their people — including human resources, compliance, payroll, talent management, time and attendance, strategic workforce planning, scheduling, and more. The biggest benefit of all is having all your people’s information in one place, giving you visibility into your workforce so you can make people-driven decisions that guide your business to success.
Interested in learning more? Watch a product tour of UKG Pro® now and see firsthand how you can use an HCM solution to deliver people-first HR services and streamline your HR practices.