You’ve got a team together, you’ve got an idea, and maybe you’ve even got funding or paying customers and you’re at a point where you really need to manage your team members’ HR matters. You find yourself facing the fact that, regardless of if your staff are employees or contractors, there are forms to be filled out and regularly updated, taxes to be paid, and benefits to be provided and managed.
These are the options currently available for HR management for startups, small businesses, and distributed teams:
PEO (Professional Employer Organizations): In this case, HR is completely outsourced such that there are no part- or full-time employees working directly for the company.
PEOs are third-party providers, often certified by ESAC (Employee Service Assurance Corporation), that serve your business HR needs from soup to nuts for approximately $120-150/employee/mo (~$1800/employee/year). The assumption is that for up to 30 people, you get savings from hiring a PEO vs an HR Manager. This fee covers managing all HR functions inclusive of benefit plans, FSA, and healthcare. PEOs provide a branded HR portal to employees to update their info as well as taking care of compliance requirements, issuing FSA (flexible spending account) cards for pre-tax medical expenses, and choosing the best health insurance plans for employees. You, as an employer do not have to.
SaaS (Software as a Service) HR Offerings: SaaS in the HR field are online software services that allow you to manage HR from a central portal. This includes a combination of some or all of the following: employee records, document/resource sharing among employees, job postings, benefit tracking, time management (can include clocking and leave tracking), and company/employee reports. In this case, you would hire a part-time HR administrator or include this in the duties of another person at the company to adminsiter the HR records via the SaaS option and ensure that all necessary forms are completed and updated regularly.
Offline HR: In this case, there is a part- or full-time employee of the company that is responsible for managing all HR functions. Offline HR management is viable mostly for a team that works in the same office. For distributed teams it becomes increasingly difficult to manage especially for various employment forms and information updates that employees need to provide.
Image credit: thehrpractice.net
This is the first in a series of posts about HR management. Subsequent posts will discuss specifics of the options listed. To be informed about new posts, subscribe to our RSS feed or sign up by email on the right.