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By: Matt Ingold

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September 26th, 2016

Why Growth Cannot Occur Without Scalability in HR

Strategic HR | HR Technology

Assuming the market conditions are right, the internal requirements for business growth are unchanging—scalability of resources, profitability for capital reinvestment, and the right team makeup and vision to propel you to the next level.

That being said, while the recipe for growth hasn’t changed, the ingredients are becoming scarcer.

In today’s workplace, mid-market employers encounter ever-increasing regulatory burdens, high talent-acquisition costs, and bolting healthcare prices. It’s difficult to recruit top-talent and be scalable when health coverage is more expensive to offer and regulatory burdens tie up HR and executive staff with transactional work.

In other words, rising healthcare costs and regulatory requirements are eroding effective staff utilization, killing scalability and recruitment, and depleting profitability for capital reinvestment. When growth happens, at best, it’s at a slow pace.

What’s the solution?

The answer resides in uncovering the unique ways that employers can streamline or offload ongoing transactional duties that otherwise reduce their capacity to pursue growth opportunities.

From what we’ve experienced at Benetech, there are plenty of opportunities to build small economies into ongoing HR administration that have significant returns on increased utilization of staff resources and greater opportunities for growth with the same or reduced staff.

This means considering the following:

Technology Resourcing: Despite the great strides that have been made in affordable HR technology, adoption rates are still slow amongst the mid-market. With the right system architecture, studies show that employers can achieve upwards of 60% improvement in utilization of staff resources and 40% greater ability to grow the company on existing or reduced staff resources.

Not to be confused with outsourcing, technology resourcing allows employers to leverage technology internally and perform ongoing HR functions with existing staff, forgoing the need to relinquish control or data to a third party outsourcer.

Scalability through technology resourcing results from process integration, automation, data-sharing, and on-demand access to workforce analytics.

Regulatory Support: This past year, HR departments investment countless hours researching the Affordable Care Act alone. In one case, a lone-HR Generalist confessed dedicating close to a month of time in ACA research in order to ensure compliance, and that was before she began the transactional process of ACA Reporting.

Scalability in regulatory support entails outsourcing the regulatory knowledge to specialists and reducing the amount of time dedicated to regulatory education.  Reinforced with the right technology resourcing, employers can significantly reduce the amount of time dedicated to ongoing DOL and IRS compliance. In the case of the ACA, the right technology resourcing and regulatory support combination can reduce time required to manage ACA requirements by up to 90%.

HR Process Outsourcing: In some cases, a third party can assume full accountability for certain transactional HR processes. COBRA administration, for example, or HRA/FSA/HSA administration are benefit functions that most employers have seen fit to outsource completely.

Scalability accomplished through outsourcing is self-explanatory—the employer is completely offloading the work to a third party.

With a combination of the above scalability measures, employers and HR departments recover resources to dedicate toward the other key areas of company growth that require greater leadership and hands-on culture management. While technology trends continue to provide resources that can assist with talent acquisition and culture management, at some point leaders need time to walk the floor and share the vision face to face with their employees.  

It’s time to put the humanity back into human resources.

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About Matt Ingold

Matt serves as Benetech's Director of Business Development. He helps employers reduce the cost of personnel management, and discover where improved talent management can give their business a competitive advantage.

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