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A Case Study - how outsourcing HR administration reduces risk

Following a recent survey of 500 SMEs, the results showed that the demands of HR compliance, Health and Safety and pensions administration are all slowing down their ability to grow.

The shocking statistics revealed that 1 in 10 business owners said that the admin burden meant they were unable to set aside 1 hour per week to focus on growth whilst 8% of those surveyed said they were unable to find any time at all.

Employment law and administration relating to holidays and working hours were quoted as significant challenges.

You can read more about the survey HERE.

This case study shows how outsourcing your HR Admin to an expert team can save you time, money and reduce risk of an expensive tribunal claim.

 

We know that HR Administration is a burden for SME's and small enterprises - every week we are called to resolve issues that could have been much less painful or avoided altogether had the basics of HR been done correctly at the outset.

The typical problems that result are:

  • missed probationary period end dates - making a dismissal a little more problematic
  • missed 2-year service marker dates - making a dismissal a lot more problematic
  • missed sickness absence information - meaning an employee gets paid more than they should 
  • missed disciplinary warning data - meaning a missed opportunity to escalate action to the next stage
  • missed holiday days deducted - meaning an employee gets more holiday than they should costing you money

I am yet to meet a business owner who went into business to do admin, so I am never surprised when HR Admin doesn't get done properly.

 

In 2016 we implemented our HR software at a parcel delivery company based near to us in Preston.

The company employs around 80 staff, many of them are delivery drivers who are away from the depot for 90% of their working week.  

The company kept HR records in a mixture of paper files and excel spreadsheets which is fairly typical of most businesses of this size.

The company's director wanted to get control of their HR admin so that she could direct her time and energy into growing the business - being highly entrepreneurial this was a huge motivating factor for her.

She also liked the idea that they could request their holidays from the mobile app on their smartphones.

HR savvy managed the implementation of the online HR software called breatheHR by:-

  • setting up all of the records and importing as much information as was necessary
  • verifying the reporting structures and testing the workflows
  • training the line managers to use the system for approving holiday requests
  • trained the in-house Financial Controller on how to input the information

We monitored the data going into the system and provided suggestions and ongoing support for how it could be improved.

Then one day, the business owner rang for some advice on a particular employee who was off with long-term sickness absence.

We could see that the Financial Controller had been entering data about the employee incorrectly - they had been adding each week of absence as a separate absence.

This means that the employee's Bradford Factor score was very high, potentially meaning they would be treated incorrectly when dealing with their sickness absence.

Also, this employee's reason for being off sick had a high probability of being classed as a disability, meaning that they would likely have protection under the Equality Act.

All of this was news to the business owner who welcomed the fact she was being alerted to a potential fast-track to a tribunal claim.

 

When we looked at more records for this employer, it was becoming clear that the Financial Controller was struggling to enter the records in a timely and accurate manner - due to it not being their area of expertise and also probably not their top priority.

We discussed this with the business owner and offered her our Managed solution.  For an additional £80 per month we took over the account and provided a total Managed Service for 2 hours per month.

Now each time there is a new employee the business is freed up from:-

  • entering the new employees records correctly onto the HR system
  • producing offer letters and Contracts of Employment
  • entering sickness absence records and knowing when action needs to be taken
  • monitoring probationary period end dates; 2 year service marker dates and disciplinary warning expiry dates

And when there is a disciplinary or a performance problem with a member of staff, they speak to HR savvy to get specific Employment Law advice on a Pay As You Go basis, safe in the knowledge that we have all of the relevant facts at our fingertips to advise them accurately.

 

The up-front investment for a business of between 50 to 100 staff will vary depending on the nature of the business and the number of records.

The example given in this Case Study invested:-

  • £750 on the implementation and training
  • £184 on the breatheHR licence and 2 hours of outsourced HR Admin expertise per month 
(rates subject to VAT, *fees payable monthly by direct debit)

So do you want freedom from the HR Admin burden?

If this sounds like the answer to your prayers, you have two options; READ MORE HERE or call us to learn more about how outsourcing your HR admin would add value to you and your business.

Tracey Murphy

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Published on: 16th April 2017
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