StORES Magazine - September 2007 - (Page 94) NUTS AND BOLTS / HUMAN RESOURCES Employee Outsourcing Farming out HR functions allows smaller businesses to focus on operations BY LIZ PARKS hen your top priorities are meeting and exceeding your customers’ expectations while maximizing sales and profits, it’s helpful to be able to focus all of your energies on managing operations. That’s why Brett Maister, CEO of Barbeques Galore Orange County, a Santa Ana, Calif.-based franchisee, opted to outsource the bulk of his back office human relations management tasks. W A similar determination motivated Darren Saville, president of The Haircutters, a 50unit chain based in Sherman Oaks, Calif., to make the same choice 10 years ago. Both companies partnered with West Hollywood-based CPEhr, one of the nation’s largest professional employer outsourcing (PEO) firms. As a PEO, CPEhr becomes the employer of record – meaning that it technically employs the workers it covers for clients like Maister and Saville. “All the employees of a CPEhr client are transferred to our federal and state tax ID,” says Ari Rosenstein, director of marketing for CPEhr. In a PEO relationship, CPEhr has the legal status to provide HR services as if they were the employer. With some 15,000 employees, CPEhr can negotiate with all the clout of a Fortune 500 company. “They’re able to negotiate better rates on medical benefits than we could ever negotiate by ourselves,” Maister says. “And their workers’ compensation program is much better than anything we could afford.” Prior to working with CPEhr, Maister’s company handled all of its HR services in-house. As it grew to a point where 94 STORES / SEPTEMBER 2007 Maister had to choose between adding an in-house HR department or outsourcing, “it was clear that outsourcing was much cheaper for us. It would have cost us about $60,000 to $80,000 a year to have our own personnel department,” he says. “CPEhr is significantly cheaper, plus there are a lot of things that they bring to the table that, as a small company, we could not do. Because they’re able to deliver more benefits and services for our [80] employees, we By outsourcing most of its personnel functions to a professional HR firm, The Haircutters can reduce the risk of lawsuits, increase internal efficiencies and improve employee productivity. don’t have the turnover rates that we used to have.” The Haircutters, on the other hand, has more than 500 employees – a stage at which it could be cost-effective to bring HR management processes inhouse. But there are many benefits to having CPEhr manage the various and often complex HR processes, Saville says. Peace of mind “I know I am paying a premium for outsourcing my human WWW.STORES.ORG http://WWW.STORES.ORG
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.