How to Streamline Back Office Operations: The Complete Guide

Table of Contents:

• Assess Your Back Office Processes
  
• Determine Your Priorities and Set Measurable Goals
• Find a Reliable Partner for Back Office Support
• The ESSG Difference

Back-office operations like hiring, payroll, and insurance and benefits administration require substantial time and expertise to perform right. As a result, managing these processes in house can strain an organization’s resources and take focus away from its primary purpose.

By streamlining these business services, companies can reduce their associated costs while relieving internal staff of this burden, allowing them to dedicate more time and energy to tasks that generate revenue and help the company grow.

As an expert in the field, a trusted business services provider can deliver back office support more efficiently and effectively than internal teams. The results go beyond simple cost savings and freeing up of internal resources.

Relying on a business services expert reduces the risk of regulatory noncompliance and the fines, legal fees, and other costs that can accompany it. Additionally, employees are better satisfied with their work when HR matters are handled quickly and correctly.

1. Assess your back office processes 

To get started, you’ll want to identify what business processes are most in need of streamlining.  By delving into individual processes, you can gain insight into gaps and inefficiencies.

 Once you have a picture of how each process is functioning, you can prioritize the streamlining of specific tasks to get the best possible return on your initial investment. After you begin realizing the benefit of optimizing the highest need areas, you can then apply some of the liberated resources to streamlining the next highest priority areas.

 In this way, simply beginning the process can have a snowball effect that can allow your business to increase its savings and efficiency over time.

Calculating Hiring Costs

Hiring costs can vary significantly based on the company, ranging from $4,000 to $20,000, not including salary and benefits. However, the majority of hiring costs, including internal HR processes, are soft costs, making substantial room for potential savings.

 If you don’t yet know how much it costs for you to recruit, hire, and onboard new employees, take the time to calculate it. This will allow you to compare the costs of performing these tasks internally versus working with an outside staffing expert.

Considering Staffing Shortages

In addition to the cost of recruitment, your business may experience trouble attracting and identifying qualified candidates. When you’re not able to adequately staff positions with appropriately trained and skilled employees, your business can’t operate at its best. Identify any struggles you have in your recruitment and vetting processes, and determine the cost of any shortage in quality employees.

Hidden Cost: Data Privacy

Hiring also comes with legal risk. In the ever-changing digital landscape, it can be difficult to ensure your company’s data storage and sharing practices remain compliant with all applicable data privacy laws. Some businesses must adhere to more stringent regulations (and potentially face more substantial penalties) than others in this realm.

 Examples include HIPAA requirements for healthcare industry businesses, and the General Data Protection Regulation (GDPR) for those doing business in the European Union. HIPAA violations can result in penalties of up to $50,000 for cases of negligence and a minimum of $50,000 in the most egregious cases of willful neglect; fines for GDPR noncompliance can reach as much as €20 million (approximately $21.1 million). If you’re unsure of your company’s ability to maintain constant compliance, consider the risks of potential fines when assessing its hiring procedures.

Auditing Payroll Processes

When examining your payroll processes, consider not only the cost of staff time spent on payroll administration, but also your company’s history of employee service when it comes to payroll.

 If your employees have reported pay errors or your business has incurred penalties due to incorrect tax calculations, consider that these kinds of errors can not only result in fines, but also sow frustration and discontent among employees. If your internal processes aren’t able to ensure consistently correct, on-time payment and quick answers to employee questions, then optimizing these processes can both minimize risk and support a happier (and therefore more productive and loyal) workforce.

When to Consider Payroll Financing

Sometimes, payroll shortfalls can arise due to variable cash flow. There may be a scramble at certain times of the month or year to collect unpaid invoices in the effort to make ends meet. If this describes your company, the potential for payroll shortfall should be a top concern, as it can pose an existential risk to the business. Ensuring consistently sufficient cash flow to meet payroll is a must.

Workers’ Compensation Coverage

Smaller companies typically must pay higher rates for workers’ compensation coverage than businesses that have several hundreds or thousands of employees. Consider whether your staff size is limiting your workers’ compensation insurance options or creating unpredictability in your rates. Assess the affordability of your current rates and how potential increases could affect your operations. Additionally, consider your company’s capacity to handle a large claim.

Managing Employee Benefits

Employee benefits are another area in which smaller companies can particularly struggle. Consider whether you’re able to provide the benefits your employees deserve. If you provide benefits, account for the time your staff must spend researching and administering benefit plans. What savings or additional productivity could the company realize if those tasks were taken off their plate?

 In addition to potential cost and time savings, consider the degree of risk inherent in your current benefit administration processes. Can your internal staff effectively and consistently keep up with evolving regulations around employee benefits? Violations of the Employee Retirement Income Security Act (ERISA) can cost companies thousands of dollars per day. When determining your back-office priorities, be sure to consider potential costs that can arise from lack of internal resources for reliable benefits administration.

2. Determine your priorities and set measurable goals

After collecting data on your current back office processes, choose priority areas that must be addressed as soon as possible. For example, if your company is at high risk of violating ERISA because your benefits administrator squeezes these tasks between the demands of their official position, improving your benefits administration process might be at the top of the list. For companies where payroll is often late or contains errors, improving that process might take precedence.

 Your priorities may shift as you gain additional insight into costs and risks, so don’t worry about getting it just right at this stage. The key is to begin to hone in on where your business operations can most benefit from streamlining. After clarifying where improvement is most needed, set measurable goals for your streamlining project.

 Identify key performance indicators (KPIs) that will signal progress and benchmarks by which you will assess performance. This will allow you to track results and measure the return on your investment in streamlining.

3. Find a reliable partner for back office support

After identifying initial areas of focus and goals, begin looking at workforce management providers. Firms that specialize in back-office processes like payroll, benefits, and workers’ compensation have deep understanding of these subjects and have already taken the time to streamline their operations.

 As a result, outsourced business services can be much more efficient and effective than covering these duties in house. By developing an understanding of your specific streamlining needs before searching for providers, you can focus your search on workforce solution partners who are best able to meet them.

What To Look For In A Business Services Provider 

Direct cost comparisons among providers can be difficult, and they aren’t the best method for selection. While it makes sense to verify that pricing is in line with industry standards, the bottom line price for any particular service or bundle of services is just one variable among several. To best ensure satisfactory return on your streamlining investment, services must be efficient, reliable, and the right fit for your company.

The Right Fit

• Choose a provider who understands your company’s unique way of doing business.
• Look for tailored services that efficiently and cost-effectively meet your needs.
• Ensure they can scale with you, adapting to changes in staffing, revenue, locations, and shifting legal or tech requirements.

The Benefit Of Experience

• Consider how long the provider has been in business and their track record in your needed services.
• Review the expertise of their leadership and team members in relevant fields.
• Recognize that back-office tasks are complex and essential, and should be entrusted to dedicated, experienced professionals.

A Reputation For Success

• Seek testimonials, case studies, and reviews that show proven results.
• Look for success in your specific areas of need like hiring, payroll, benefits, insurance, or expansion support.
• Choose a provider with a strong reputation to ensure confidence in their capabilities.

How Can A Business Services Provider Help?

Determine what resources your company can initially make available for implementing a new solution, so you can develop a clear budget for the first phase of the project. Then, meet with your chosen business services provider to discuss your company’s needs and goals. They will be able to design and implement a strategy to address your priorities and use data analytics to track progress toward goals and demonstrate ROI. Below are some of the important ways a workforce solutions provider can streamline business processes:

Recruitment & Hiring

Business services providers can draw from large pools of candidates to staff key positions or hire a large number of new employees, saving time, effort, and money you might otherwise have to spend getting the word out and attracting the interest of suitable job seekers.

 They can also streamline onboarding and training processes, ensuring all forms (such as W-4s, I-9s, and direct deposit) are in order and allowing established employees to maintain focus on their duties rather than taking unnecessary time away to bring new hires up to speed. Critically, they can ensure data security meets current government and industry standards to keep your business compliant with privacy laws.

Payroll

A business services provider can free up your staff’s time and ensure payroll and withholding are done correctly. Outsourcing payroll helps ensure employees are paid on time every time, regardless of what’s happening at the office. If cash flow is an issue, payroll financing services enable you to avoid the risk associated with unpaid invoices by ensuring the funds will be there when you need them.

Workers’ Compensation

Because business services providers work with vast numbers of employees, they can leverage the power of numbers to make the cost of insurance coverage more predictable and affordable. They can manage any claims that are filed, allowing your employees to avoid the distraction of dealing with them internally while ensuring they’re handled correctly.

 If your company is spending too much time and/or money on workers’ compensation insurance, this could be an immensely valuable service.

Employee Benefits

In addition to more affordable workers’ compensation insurance, business service providers’ power of numbers gives them expanded access to high-quality, affordable employee benefit plans. These providers work with employee benefits all the time and have the specialized knowledge needed to help you select plans that best serve the needs of your workforce and competently administer them.

 Outsourcing these tasks not only enhances efficiency but also reduces the risk of noncompliance and can provide great customer service for your employees, supporting a more satisfied workforce.

4. The ESSG Difference

Employer Solutions Staffing Group was founded in 2005 when a labor law attorney, a financial banker, and a business development expert combined their knowledge and strengths to create a unique, comprehensive solution to the most intractable workforce management problems.

Over the past two decades, we have built a track record of helping clients reduce costs, increase revenues, and overcome hurdles to expansion. As your strategic partner in growth, we bring the expertise, knowledge, and years of experience needed to help your staffing agency maximize its potential.

We work with businesses of all sizes, offering a personal touch and tailored solutions to fit a vast range of needs. Whether you just need help with payroll, or getting better benefits for your employees, or if you’re looking to streamline all your back-office tasks, we can provide the expert help you need.

Reach out to our team today to learn how we can help you reach your business goals.