How to reduce the time and money spent on HR tasks, payroll and healthcare.
Every business owner has to deal with paperwork on a daily basis, and, unfortunately, dealing with this can be a time-consuming, tedious task.
A recent nationwide small business study commissioned by Paychex, Inc., reveals that across industries, including construction, owners spend a significant amount of time on paperwork related to compliance, government regulations, benefits administration and other related issues. Specifically, small business owners have the following challenges:
• Healthcare administration –38 percent of respondents identify healthcare administration as the most cumbersome issue to manage.
• Human resource tasks –30 percent consider HR tasks difficult to manage.
• State regulations –28 percent consider state regulations based on state budgetary challenges to have the greatest impact on their business.
• Employment law –25 percent of businesses consider employment law to have the greatest impact.
The solution to reduce or eliminate the time and money spent on administration and paperwork often can be found through outsourcing these responsibilities. Construction business owners overseeing small- to mid-sized operations may also help avoid costly compliance errors associated with employment laws, such as the Fair Labor Standards Act (FLSA) and other federal wage and hour laws. In 2008 alone, the U.S. Department of Labor fielded 23,845 complaints and collected more than $185 million in back wages, in addition to $9.9 million in civil money penalties.
Consider these best practices to tackle paperwork challenges:
Use an HRMS System
A human resource management system (HRMS) refers to a basic system used to manage the employee-employer relationship. It also assists with overall HR compliance regulations. Outsourcing HRMS is often less expensive than managing in-house HR functions, and it eases employees' administrative tasks.
Employers benefit from a secure, accurate software system that can manage data from multiple sources and increase reporting accuracies. A fully integrated HRMS system typically provides services for many basic HR options, including payroll management, benefits administration and hiring practices.
Full-service HRMS systems can help businesses navigate through rigorous reporting requirements for cafeteria plans (section 125 plan), retirement plans or employee assistance programs. A solid HRMS may help a construction company meet other regulatory demands, including compliance with the FLSA, OSHA accident reporting and recordkeeping and the Consolidated Omnibus Budget Reconciliation Act (COBRA). Overall, delegating these administrative tasks to an outside provider can save a company time, which allows others to focus on the core business.
Outsource Payroll
Consider the time and resources it takes small- to mid-sized businesses to effectively manage payroll bookkeeping practices. The average small business files 32 tax deposits and 16 returns each year. For businesses that choose to process their payroll manually, many will face the burden of inputting data, reporting and remitting taxes to government agencies, maintaining software and staying updated on the latest government regulations.
When considering outsourcing payroll to mitigate paperwork, business owners should perform a cost-benefit analysis. This includes current time and expenses associated with payroll tasks—for example, the time it takes to calculate payroll each pay period or the time required to generate reports for an outside CPA. Payroll processing is not limited to writing checks and requires an in-depth review of employee time and multiple calculations, including a mix of federal, state and local tax obligations.
Erroneous documentation can lead to costly IRS tax penalties, which can adversely impact a business' bottom line. Businesses should evaluate the many complexities associated with the intricate world of payroll paperwork. They may find that using a full-service outsourcing provider will result in less costly monthly expenses.
Overcome Healthcare Obstacles
One of the most popular benefits used to attract and retain new employees is the availability of health insurance. The 2011 Paychex survey revealed that 59 percent of small business owners consider it important to offer health insurance to employees. In many cases, the cost of spending a dollar on health insurance outweighs the benefits of a
