Should I Outsource HR for My Portable Restroom Rental Business?

A new portable restroom business owner typically operates in a state of constant motion for the first months to years, struggling to over-deliver on service and generate revenues to grow the company. As staff size increases, needs change. If the company grows large enough, back-office operations eventually must be expanded to include HR, Payroll, Accounting, IT and a number of other administrative teams. Some of these can be well-managed by just one person. In Human Resources, however, the number of specializations and the large skill sets required for each role make it unlikely that one person can be found who can adequately fulfill all HR needs. For small to medium-sized businesses, HR outsourcing typically offers the most practical alternative to in-house HR.
Managing HR In-House, vs. Outsourcing
Your portable toilet business may have reached the size-threshold, at which you have too many employees to cost-effectively manage the vast number of functions that a complete HR department provides. At this point, you either need an in-house solution that provides all of the resources to perform thoroughly in the following general HR and related operations as well as a number of others, or you’ll need an outsourced HR service to carry this unavoidable load of responsibilities for you:
Recruiting — A full-scale HR department needs a highly effective recruiter, modern HR recruiting platform technology, and data resources in order to most efficiently attract top talent to your company’s recruiting pipeline.
Compliance — Working closely with your company’s legal experts, your Compliance Specialist can help ensure that you are consistently in compliance across the whole spectrum of potential causes of action that can lead to extreme financial losses.
Training — HR training specialists can provide a full range of safety, accident investigation and incident management, diversity, sexual harassment, and numerous other types of HR-related training.
Benefits Administration — Group health insurance plan administration, 401K management, HAS, Flexible Spending accounts, Dental and Vision plan administration, and traditional retirement account options all require detailed management by experienced professionals.
Risk Management — Workers’ Comp, HIPAA, COBRA, Safety, ADA and other areas of risk require well-qualified administrative management to ensure against preventable losses.
Payroll Processing — As an HR-related function, payroll requires proficient management of Social Security, Benefits and tax withholdings, tax reporting (including in municipalities, as applicable), handling I9s, and a wide range of payroll inclusions and modifications.
HR Management — Many good outsourced HR services can routinely spend time onsite and work with employees throughout your company, to help maintain HR-related training, update documentation of changes in employee’s HR files, address performance and interpersonal issues, design performance improvement plans, manage or support myriad kinds of internal problem resolutions, and even provide employee appreciation and team building event planning and other culture-building activities.
How Much Outsourced HR is Right for Your Business?
Although a good outsourced HR support provider can provide most or all of the above functions with impressive efficiency and ideal consistency, you may need or prefer only a few of the available outsourced HR services. Each business has its unique needs, but gauging your level of HR needs by the size of your business is a good way to help ensure your company has the appropriate extent of HR functionality at each stage of growth.
Up to 10 Employees
Within the first several years, a startup portable restroom rental businesses typically has only a few employees. With under ten employees, owners, managers and administrative support staff can usually manage payroll, hiring, onboarding and all other HR responsibilities and deliver customer services, conduct field services training, perform equipment and vehicle maintenance and generate the sales needed to grow the business.
It’s a lot, and every successful portable restroom business owners has his or her astounding stories of incomprehensible entrepreneurial feats during this phase of the enterprise. Nevertheless, with their tiny but talented teams, the work gets done, and it is actually often more financially practical at this staff size to do most or all of the HR work in-house.
Between 10 and 50 Employees
As the business grows, HR needs grow with it. Compliance issues multiply, which means that professional attention to risk management becomes more imperative. Payroll and benefits management become a staggering time-consumers. Recruiting, Safety and other HR-related training needs increase. Employee satisfaction and retention rates rely more and more on effective HR systems and HR’s internal customer service quality. Low staff retention rates naturally translate to diminishing external customer service quality and satisfaction rates, making HR a pivotal resource for continued growth and branding.
With upwards of 10 to 15 employees, employers often discover that the burden of managing all HR functions in-house has become a detriment to the quality of their efforts to add value to customer services and is negatively impacting the amount of their time and energies that were routinely spent on growth activities back when there were fewer employees. At this juncture, outsourcing the more complex and time-intensive HR functions is likely to offer business owners their most reasonable option for controlling administrative costs and freeing up resources better applied to core operations.
Between 50 and 500 Employees
Portable restroom businesses that have grown into this size range are often in the process of scaling, sometimes with aggressive growth plans. Recruiting, training, onboarding, personnel development, legal compliance, managing risk other HR responsibilities rise to become high priorities during this phase of enterprise growth. Hiring employees to run new branches in other states may expand the range of issues in the areas of Recruiting, Payroll (tax reporting), Training, Benefits management and Compliance, among other HR and related functions.
During this phase, it is likely to be less costly and more efficient to maintain outsourced HR and related services in areas like Payroll, Benefits management and HR Legal support, as qualified professionals in these specialties are expensive hires and normally do not have access to the same vast range of resources that a PEO or other HR services provider has. The same amount of work can typically be done off-site at a fraction of the cost of a team of certified professionals to fill these roles in-house.
Over 500 Employees
It is likely to remain more practical, in terms of cost, for the most complex of HR functions to continue as outsourced operations until a business exceeds 500 employees. Larger portable restroom rental businesses may find that returning to in-house HR functions offers advantages in the competitive employment market and/or that the gap in operating cost estimates may close between certain in-house and outsourced HR operations, making in-house HR a more reasonable than it has been up to this stage of growth. In some cases, due to various unique needs, companies continue outsourcing HR beyond 1,500 employees.
Making Your Decision about HR Sourcing
HR needs vary from one business to the next, even within the same industry. There are more ways to think about HR for your portable restroom rental business, in addition to basing your needs assessment largely on current staff size. You should also consider your strategic plans. Do you plan to hire many new employees over the next several years? You’ll need the benefit of HR support that can keep up on all fronts, including Recruiting and onboarding, Training and Compliance. Do you need to improve your staff retention rates? If so, you may need an in-house HR professional to work directly with your staff to help build the company culture.
As a small to medium-sized portable toilet business, if you opt to hire an in-house HR employee, you are likely to still benefit from outsourcing some of the HR functions that do not require very frequent onsite interaction with employees. You may choose to outsource Benefits management, Payroll, and other complex administrative HR functions, and select an in-house HR employee who specializes in Recruiting, Training, Compliance or another HR function that also lends very well to team and culture development.
The key consideration should be to avoid over-burdening your in-house HR employee(s) with a mountain of tasks that can be done more efficiently by an entire HR team of experts off-site at a fraction of the cost of hiring just one certified HR professional.
Finally, in your decision-making process regarding HR outsourcing, ask yourself how much more value you may be able to add to your company by freeing much of your own or others’ time that is currently spent on HR tasks, to pursue back-burnered ideas for generating more revenues. At least partial HR outsourcing may offer the solution you need in order to reallocate resources to core operations that best advance your business goals.
Source
https://justworks.com/blog/when-to-get-an-in-house-hr-department-and-when-to-outsource
https://www.inc.com/hr-outsourcing/best-hr-outsourcing-for-small-business-in-2017.html

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