Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/55324
A resource for Third-party firms can help handle complex payroll and personnel issues— as long as their role is clearly defined. BY MAURA KELLER E ntrepreneurial business owners are oſt en frustrated with the time and energy they spend on administrative issues relating to employment. Savvy business owners also see the risk they are exposing themselves to by not proactively managing their employee issues. However, these same business owners want a cost-eff ective solution to these issues. Th at's where outsourcing their HR functions comes in. According to Daren Fristoe, president of Th e Fristoe Group, a human resources fi rm in Lee's Summit, Mo., there are three key levels of outsourced HR off erings. "Th e fi rst level is a complete redirection of the HR department, where the client outsources the entire HR function to a third-party provider, including staffi ng, salary and benefi ts administration, performance management, payroll processing, compliance and record keeping, training, unemployment and workers compensation claim processing," Fristoe says. "In this scenario, the HR provider becomes part of the company's organization chart, and our role is seamless to the balance of the employees as a retained resource, typically with an onsite and e-mail presence." Th e second level is a more blended model that allows for outsourcing of selected tasks and responsibilities, working in conjunction with existing client staff . "Under this model, the client may have someone on staff already handling basic HR functions, and the third-party HR provider becomes a resource that fi lls any gaps, audits and modifi es existing processes as needed, and provides overall administrative support," Fristoe says. "Again, the HR provider is seen as part of the team onsite and online." Finally, the third level is truly one with à la carte services. In this version, the client has specifi c needs and the HR provider creates and implements targeted solutions. Typical off erings in this area include handling employee hiring and terminations, training, performance management and counseling, employee/management development, and the creation of an HR documentation system with integrated employee handbooks, job descriptions, performance appraisals and other requisite documents. 28 | February 2012 • www.specialty-coffee.com "While still an ongoing relationship, the HR provider has less of an onsite presence in this role," Fristoe says. "Th e primary advantage of using an outsourced HR provider is the assurance of professionally trained HR staff handling the client's employee matters, allowing the business owner and operator to focus on doing what they do best—making a sustainable profi t for their business." Yearly fees are determined by several factors, including number of employees, salary rate, industry, and additional services the human resources fi rm may be providing. According to Fristoe, the cost of such services is contingent upon a number of client-specifi c factors, including the required level of services desired, the number of employees, the proximity of locations (if the client is a multi-unit organization), the marketplace costs, and the need and frequency of onsite versus virtual HR staff presence. "As an example, if an owner is requiring a full-time onsite HR provider handling all of the standard HR functions, the owner could expect to pay somewhere in the broad range of $3,000 to $6,000 per month," Fristoe says. "Any derivation of the client- specifi c needs will obviously impact the cost." OUTSOURCING AND GROWTH Andrew Hetzel, consultant at Cafemakers, a specialty coff ee consultancy, says that single or small multi-unit operators (one to three locations) tend to provide their own services with the assistance of an accountant, but move to a partially or fully outsourced program as the size and complexity of their business grows, specifi cally to handling payroll, tax and health insurance coverage. "General HR training for these companies is typically provided by on-staff personnel, such as a shop manager, using commercially available templates," Hetzel says. With outsourcing HR, the business owner and his or her designated managers maintain the same control over their employees as they would in a traditional business by proxy