A lot of traditional Human Resources departments are having a hard time these days. The standard model of a team of in-house practitioners – or, in the case of smaller companies, a single specialist – is being challenged by mounting demands on all sides. Companies insist on greater efficiency and accountability; employees look for expanded services and more one-on-one assistance with HR issues; and external entities ranging from government regulators to contracting firms are demanding more time, paperwork, and effort.
In most cases, that means that something’s got to give; an HR lead takes the rap for missteps, while the practice succumbs to cost reduction measures, and ultimately operates with diminished efficacy even as the demands upon it mount in intensity and urgency. In a lot of cases, that culminates in an inevitable reshuffling of positions, responsibilities and personnel that fails to address the underlying issue: To perform optimally, modern HR demands a level of expertise, manpower and investment that most companies just can’t provide.
What’s needed isn’t necessarily a new team lead, new titles or new personnel in the seats – it’s a new approach. Peak-performing HR, in 21st century terms, is more than masses of representatives tucked into a basement office cubicle farm – it’s the ability to deploy focused, task-specific expert talent when and where it’s needed, with the ability to “dial back” as appropriate or refocus resources elsewhere when necessary. That typically isn’t possible in a traditional HR practice operating with fixed staffing, infrastructure, and tool sets.
These are the conditions that have led to the emergence of the modern-day PEO. The need for an agile, responsive HR practice armed with the infrastructure, skill set, and expert personnel capable of effectively handling the full scope of current HR responsibilities makes a cosourced or outsourced HR solution increasingly valuable. Rather than remaining tied to a rigid and unresponsive internal practice or a seemingly endless cycle of expensive and risk-prone HR reorganizations, more and more companies are opting to forego hiring new HR leadership and bringing on a PEO or HR administration partner instead.
A qualified, professional PEO is capable of providing a level of focus, knowledge, and institutional strength to HR capabilities that even the best practices – and practice leaders – can seldom match. Today’s HR is an expansive and ever-changing endeavor, and it takes a relentless focus on remaining current with best practices, regulations, and needs in order to be effective. While that focus is part and parcel of a good PEO’s normal activities, it is unnecessarily time- and capital-intensive for an internal practice. When it is possible for a partner organization to provide high-quality services tailored to a company’s specific requirements, and to do so within a flexible framework that responds to fit changing needs, it makes less sense to stick with a problematic traditional model.
Effectively, a company’s implementation of a PEO or HR cosourcing strategy amounts to an offloading of risks, responsibilities, and costs associated with activities it has no real interest in being involved in – HR is not a profit center. Partnering with a capable PEO enables a company to refocus upon its core business and profit-generating activities, aligning operations to deliver optimal business results. In today’s hypercompetitive environment, that can be a distinct advantage; a timely rethink of a company’s approach to HR – and the willingness to change fundamental approaches – can result in not only a high-performing HR function, but a high-performing business.