The August broadcast in the ongoing MedHQ webinar series shared key learnings about outsourcing HR gleaned over the company’s 14-year history. Titled “Is It Time to Outsource HR?”, the online seminar featured MedHQ Chief Executive Officer Tom Jacobs talking about the who, what and why of outsourcing the HR function, and sparked dialog on the benefits of outsourced resources and ease of transition for a typical surgery center.
Jacobs outlined the various types of Human Resources Outsourcing (HRO) vendors, all of which share a common goal of taking on the duties and takes of supporting the needs of the employees in an ambulatory surgery center (ASC.) Despite the differences related to who takes responsibility for the role of “employer,” Administrative Services Only (ASO) offerings, Professional Employer Organizations (PEO), Long-Term Staffing solution and Management Services Organizations (MSO), all strive to save their clients’ money, reduce risk and enhance business performance, Jacobs explained. MedHQ offers both ASO and PEO options among its services to clients.
HR Outsourcing firms take on the responsibility for administering payroll, handling benefits, resolving employee conflicts and other activities critically important to the successful operation of an ASC.
“If those things aren’t done well, they can mushroom,” Jacobs said. “Outsourcing your HR can help you become more efficient; help you manage employee relations and compliance risks; and relieve managers from some of the administrative burden. We don’t directly improve patient satisfaction, or directly improve patient outcomes, or add a single dollar of revenue directly to your ASC. But we do free up time so your management team can do so.”
A former ASC administrator himself, Jacobs shared five essential functions delivered by HRO firms to deliver on their promises of reduced risk, reduced cost, and improved performance:
- Act as HR generalists / manage employee relations
- Manage Vendors
- Automate and improve process efficiencies using HCM software and automation
- Administer employee benefits
- Deliver best practices for safety and workers’ compensation insurance
As the HR Outsourcing market has matured over the past decade, many firms offer optional additional services as well, such as the Accounting Services offered by MedHQ.
Now a maturing industry, there are 800-900 HRO firms now operating in the U.S., and the PEO industry grew at a compounded annual growth rate of 8.7% from 2012 to 2017, with forecasts suggesting growth at a rate of nearly 3% through 2022. Jacobs suggested several possible reasons for this growth, from an increasingly complex regulatory environment causing small and medium-sized businesses to look for ways to handle compliance more efficiently, to new software platforms supporting the HRO model, to the proven track record of many firms in the HRO space.
And when it comes to ASCs, Jacobs sees a similar trend:
“There is growing recognition of the benefit of contracting with specialist management services firms to help ASCs thrive in a market that is more and more competitive each day.”
Jacobs highlighted specific examples of how HR outsourcing helps ASCs deal with the rising cost of health insurance, keep up with changing healthcare regulations and embrace software-enabled solutions to automate an HR information, manage the “high touch” aspects of employee relations to minimize risk – millennials in the workforce, employee turnover, etc., and helps manage risk.
“At MedHQ, we’ve been tracking what we call HR Risk Events for almost 8 years,” Jacobs explained. “Why? It’s the high-risk events that matter most. For example, on the low end, 55 unemployment claims we tracked had an estimated average risk of just under $6,000. But on the high end, just 11 sexual harassments cases were estimated at $95,000 each. Focus matters.”
Since no discussion of outsourcing would be complete without acknowledging the most frequent objections, Jacobs addressed the cost of HROs and the perceptions among some that fear loss of control over ASC operations.
“All of the services that are performed by an HRO are either already being performed by someone at your ASC – but an HRO/PEO will perform them more efficiently, thereby saving money for the ASC,” he argued. “Or, there are HR services that are being neglected or sub-optimized – so having an HRO or PEO perform them will improve productivity, resulting in even greater bottom line performance or better patient care, or both!”
If your organization is interested in saving money, reducing risk, and improving productivity, click here to chat with a member of the MedHQ team about your HR needs. And, to register for upcoming broadcasts in the ongoing MedHQ webinar series, click here.