There’s one thing we know for sure: across the board, labor is one of the biggest expenses for restaurants and hospitality businesses.
But some things seem less certain: did everyone get paid the right amount at the right time for the right hours worked this week? Are the books 100% compliant? How confident are you that you’re maintaining complete compliance with all labor laws? If a particular schedule swap is made, how does that affect person A’s overtime, and person B’s spread of hours?
These questions, and countless others, add stress and strife to the lives of your managers. Any mistake is costly. Plus, when mistakes are made with payroll, morale plummets. How can you expect your team to deliver great service to guests if they’re frustrated or stressed out? As a result, the impact on your employees’ experience and the guest experience is tangible.
And that’s just the beginning. What about when questions arise about benefits, payroll glitches, or company policies? How do you maintain compliance when laws vary city to city, state to state? What about when they change unexpectedly?
The burden of HR and benefits administration often falls on managers who are stretched too thin as it is. Things slip through the cracks. Frustrations build. The more time your managers spend trying to resolve HR issues, the less time they’re focused on revenue-driving activities. If they’re stuck in the back of house they can’t be out front, improving the guest experience.
A Better Way
For some, outsourcing HR and benefits administration and/or payroll services can be a game changer. For restaurants and the hospitality industry especially, outsourcing comes with some major benefits. It lifts the burden on staff, improves the guest and employee experience, and reduces the risk of non-compliance. Plus, it helps contain costs.
There are a few different approaches to outsourcing HR functionality. What do these options look like?
Outsourced Payroll & Tax Filing Services
No matter how carefully you manage payroll, when using manual systems, errors are unavoidable. Outsourcing is a great way to take payroll logistics off your teams’ plate. And, it’s key to boosting accuracy. When outsourcing, be sure to select an organization with robust HR and payroll technology, checks and balances in place, and integrated, automated processes. Otherwise, the risk of manual error remains.
Outsourced payroll also removes the burden of W2 reporting and tax filing from your restaurant. Instead, federal, state, and local taxes are calculated, paid, and filed automatically. This reduces your liability while ensuring compliance. For restaurants, it’s critical to select a partner who understands the nuances of the hospitality sector. That way, your dedicated payroll specialist can give your team the answers they need when questions arise.
Finally, when selecting a partner for payroll services, make sure they can fully integrate with your systems. Why? If you can fully integrate HR, scheduling, time and attendance, and payroll, one correct set of data flows through the system. This ensures employees get paid on time, and accurately for the actual time worked. As a result, paycheck accuracy goes up, and fees and fines go down.
Outsourcing HR and Benefits Administration: PEOs and HROs
From tracking applicants to managing COBRA benefits for past employees, you need to look after your team from the moment they apply until even after they’ve walked out the door. Throughout the hiring and onboarding journey, it can be helpful to have an experienced HR partner to manage the nitty-gritty. They can help make sure you’re compliant along the way. Outsourcing HR and benefits administration can help you keep up with ever-changing legislation. There are two main options for outsourcing – PEOs and HROs (also known as ASOs).
PEOs, or Professional Employer Organizations, offer co-employment arrangements to give smaller businesses an opportunity to achieve savings through an economy of scale. Essentially, a PEO partner becomes an “employer of record,” resulting in a shared tax ID. So what? Your restaurant maintains all control over operations, workforce management, full employee-lifecycle management, company culture, and recruitment branding. But you can transfer HR functionalities over to the PEO partner…along with some of the risk. The PEO focuses on ensuring compliance. They also provide access to a better range of benefits and liability coverage, especially for smaller organizations. PEOs share the liability risk and reduce administrative costs. They help businesses achieve big savings.
Like PEOs, HROs (Human Resource Outsourcing, sometimes called ASOs, or Administrative Service Organizations) oversee HR administration. They overlap in most ways, and offer many of the same benefits. The main difference is that HROs do not include a co-employment arrangement. That means that unlike a PEO, HROs can’t share liability risk. HROs will typically handle payroll and tax filing. However, paperwork gets filed under your federal employer ID number, not a shared one. HROs provide a great option for organizations that already have highly competitive workers’ comp rates. Or, those who may have an extenuating circumstance that limits co-employment arrangements.
This is just the tip of the HR iceberg. We help restaurants like yours:
- Contain costs
- Minimize risk
- Relieve the administrative burden of HR and payroll
- Improve your employee and guest experience
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