HR leaders face an insurmountable hill to climb in their week-to-week grind. Payroll accuracy, rising health plan rates, AI-integrated technology, and ever-evolving compliance are just a few of the hot issues plaguing HR departments everywhere. No matter how much water you throw on the flames, they seem to be spreading faster.
Firms are frequently resorting to outsourced HR services to help manage this workload. So much that the sector for HR outsourcing is anticipated to grow at a rate of 6.19% through 2032. No doubt HR leaders are looking to offload some tasks so they can focus on the more complex issues in the business cycle.
Searching for a partner presents its own trials, however, as not all HR outsourcing solutions are created equal. Standard models and proprietary software providers offer varying levels of support, but there is one type of outsourcing partner that goes beyond the rest – a Managed Service Provider (MSP).
What is a Managed Service Provider (MSP) in HR?
There are two different types of Managed Service Providers in HR. One is related to staffing and recruitment, and the other is an HR outsourcing model that becomes an extension of your HR department. Under this model, your partner will fully manage the day-to-day HR tasks associated with benefits, payroll, HR, and technology. This removes the administrative burden for HR leaders and allows them to focus on what is most important for growth – strategy, direction, and execution.
MSP programs can be rolled out by individual services, or they can be allotted as an all-in-one package. For example, the former scenario may occur when a loyal payroll specialist retires, and the firm decides that an outsourced payroll provider is an appropriate replacement. Meanwhile, a fast-growing midsized business may only have one HR leader running the entire department and decides to recruit all services from an MSP, alleviating the director’s administrative burden as the organization expands.
MSP Solutions
Let’s look at each solution an MSP offers and how these firms systematically implement these services with partnering businesses.
Benefits Administration
As an HR leader, how often do you find yourself answering an employee’s question about benefits or helping them find information on their enrollment? A Managed Service Provider in HR will provide a team of customer service specialists who will answer these questions for your staff. They will handle the big open enrollment season and manage all qualifying life events throughout the year, all while serving as a one stop resolution who will coordinate between providers, insurance agents, and your team.
Partnering with an MSP also means that benefits-related compliance is managed. The Affordable Care Act (ACA) will have reporting obligations handled and 1095 forms sent out for applicable larger employers (ALEs). Plus, support teams are trained in HIPAA and observe all features of this requirement when aiding your employees.
While an MSP does directly manage a lot of features, it does not embed itself into your business’s ownership model like a professional employer organization (PEO). An MSP is a type of human resources outsourcer (HRO), and a hallmark of this service is that it allows you to retain your autonomy. Top-MSPs are broker-agnostic and allow the HR leader to choose their broker of choice. This empowers you to find the best health plan that supports your operations.
Managed Payroll
Running payroll is the most time-consuming function of the HR department. When you consider differing worker classifications, a multi-state or global workforce, and changing taxation tables at the federal, state, or local levels, there are many variables that can send your payroll report into a tailspin.
A Managed Service Provider will handle the entirety of the payroll preparation – relying on you for verification and final approval. This includes tracking of time and attendance, finding and resolving calculation errors, deducting the appropriate payroll taxes at the federal, state and local levels, and providing automation and ad hoc reports.
Once again, helping HR leaders keep autonomy is an overarching goal of an MSP, and a good provider understands the importance of final payroll approval. While a reliable MSP can handle the job, it is important to leave you in the driver’s seat. This is why HR leaders always give their final blessings before payroll is sent out.
HR Compliance
Bills governing manpower and the workforce are constantly being passed into law, and these new rules become new headaches for the HR department. These laws are always added to, and very rarely taken away. This, of course, means new work for the HR team. A competent Managed Service Provider not only makes it a priority to stay on top of these new developments but also streamlines processes for implementing new compliance items.
An MSP will help you manage laws and regulations such as the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and the Americans with Disabilities Act (ADA), to name a few. Routine tasks are managed and/or automated, although the final onus of responsibility does lie on the HR leader’s shoulders.
On top of regulations, an MSP will also assist in onboarding and collecting I-9s and background checks/drug screens, providing employee handbooks, and sending federally and state mandated employment posters, such as wage and OSHA.
HR Technology
While some HROs may provide similar coverage for the services aforementioned, the true separation from a standard HR outsourcing firm and a Managed Service Provider is how they administer HR technology and HCM systems. It is necessary for the HR department to possess and use some version of an HRIS, with many opting to use a fully functioning human capital management (HCM) technology. Standard HROs expect your HR team to manage the software, while an MSP manages it for you.
Depending on the company, the MSP will either offer proprietary software of their own design or allow the HR leader the autonomy to choose the HCM. Because a Managed Service Provider is a boutique characterized by offering a high-end experience, these companies typically are not interested in investing in proprietary technology. They will, however, recommend certain systems to use over others.
Some of the features an MSP will manage in your HCM include functions related to the employee lifecycle, such as job postings, onboarding, and job descriptions. Within the HR module, they will manage compliance, performance reviews, and leaves of absence. One important benefits function is bill reconciliation, and a competent MSP watches over this like a hawk to ensure there is no profit leakage – saving you time and money.
It is important to note that while an MSP manages the day-to-day functions of your HCM, this does not exclude you from using the software. If anything, this gives you more time to view the dashboard, analytics, reports, and other important features that allow you to make decisions and guide your team to success.
Corban OneSource is a Managed Service Provider in HR
Midsized businesses across the United States and Canada need back-office support. This is such a pivotal stage of growth where small business resources no longer scale, and your revenues cannot justify the self-sufficiency investments that enterprises have long enjoyed. At this stage of the business cycle, outsourcing HR becomes a wise strategy.
Corban OneSource is a Managed Service Provider, and we have been providing experienced HR support services for growing companies for nearly three decades. We understand the challenges and immediate needs of HR departments attached to midsized businesses, and our platform acts as an extension of your HR team. We are not a vendor; we are a partner who wants to see you succeed.
As a Managed Service Provider, our support team offers white glove treatments to you and your employees. We customize our services and support prompts to match your branding and give your employees multiple options to reach us. To help you succeed, we want to help increase your credibility by knowing your employees have trusted support options in the HR department. Reach out for a capabilities call and discover why an MSP may be the solution for you.
FAQ
A Managed Service Provider will fully manage the day-to-day operational tasks associated with the HR department. This includes routine tasks in benefits, payroll, HR, compliance, and HR technology.
An MSP will handle tasks related to onboarding, such as managing I-9s, W-4s, drug screens, job postings and job descriptions. They will also manage tasks in the HR module like compliance, performance reviews, adverse actions, and leaves of absence. An MSP also handle all routine tasks within benefits and payroll.
An MSP does not have to replace your internal HR staff, although some partners have used services to replace an outgoing specialist. A Managed Service Provider will handle all routine tasks in the HR department and leave strategy and direction up to the discretion of the HR leader.
Yes. Though a Managed Service Provider does remove the need to manage routine HR tasks, the HR leader may still be very involved with the HCM by using the dashboard, analytics, reports, and any other necessary functions to build strategy.
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