Welcome to the first post in a series labeled “Future of HR.” As one of our key objectives with Poprouser is future-proofing businesses, we decided that a series highlighting concepts, frameworks, tools, and techniques that will supercharge companies in the present, and allow them to be more durable and resilient in the future is essential for thriving in our chaotic business landscape. Tech advancements, cultural shifts, and home life realities have enabled virtual or remote working, specifically virtual HR services. Virtual HR has transformative potential in your organization, and can empower you to stay ahead of the game. We’ll talk about how.
First, here’s what we already know:
- The nature of work is changing rapidly. An Accenture survey of 1600 global executives found that almost 75% of companies already integrate AI into their business. In this area and other frontiers, employers are facing drastic skill shortages.
- In 2020, COVID-19 lockdowns accelerated the already growing trend of administrative work being performed outside of an office environment. Global Workplace Analytics estimates that 25 to 30 million U.S. employees will work from home by 2025.
- Following the COVID-19 lockdowns and infection reduction measures from 2020 to mid 2022, employees have begun to reject companies’ efforts to drag their employees back to the offices.
- Gig economy participation rose dramatically when ride-share, local delivery, and freelancer apps started to gain traction in the 2010s, and now almost 5 million gig workers are in the U.S. labor economy, based on IRS data.
Now, here are consequences of the above you may not know:
- The reasons why people don’t want to return to the office are actually quite logical. 76% of employees globally want to continue working from home at least 2.5 days per week.
- Inflation is making it harder to justify consuming personal resources without reimbursement (commuting, meals, and snacks) without personal added value.
- The cost of employee benefits and rewards is rising. Health insurance alone is becoming unsustainable for many small employers.
- Companies are having a harder time filling full-time roles, even with grand benefits and pay. Your job ads are not just compared to your industry competitors anymore, they are compared to gig economy roles and people just fed up working for someone else choosing to go independent.
- People are not finding hope in long careers with a single company.
With all this, it’s getting harder to hire, develop HR talent internally, and pull them into the office to execute on the HR strategy. If you cannot develop your HR talent internally fast, you will waste a lot of company resources, and struggle with retention at the same time. This is where virtual HR services come in.
Virtual HR is a way for businesses to access the expertise and support of HR professionals without having to hire them full-time, or in-office. Virtual HR providers generally offer a wide range of services, including:
- Recruiting and hiring
- Onboarding and offboarding
- Payroll and benefits administration
- Compliance and risk management
- Employee relations
- Training and development
- Performance management
- Diversity and inclusion
Virtual HR services can be a great option for businesses of all sizes. They offer a number of advantages, including:
- Cost savings: Virtual HR services can help businesses save money on HR costs, such as salaries, benefits, and office space.
- Flexibility: Virtual HR services can be scaled up or down as needed, which gives businesses more flexibility to adapt to changing circumstances.
- Access to expertise: Virtual HR providers offer access to experienced HR professionals who can provide expert advice and guidance.
- Improved compliance: Virtual HR providers can help businesses stay compliant with all applicable laws and regulations.
But Can It Work With MY Business?
The business case for virtual HR works for almost any type of organization, even construction, hospitality, retail, and manufacturing. Here are a few key examples of where any organization can benefit:
Administrative HR Work
Busy executives and leaders have been delegating mundane tasks to virtual assistants for over a decade. Before online assistants, since the mid 1970s, workers have been effectively using telecommunications to perform customer-facing tasks. So now, we have the same concept, but our tools are just better. Just as a routine task that an executive can perform without requiring signatures and authorization can be delegated to a virtual assistant, any regular HR task that doesn’t require you to sit in person can be delegated to a well-trained HR virtual assistant.
HR Technology Implementations and Management
In this era, HR is partially an IT function, in which HRIS specialists, subject matter experts, and project managers select technologies, set the budget, migrate data, implement and integrate systems, set security permissions, develop measurements, and manage tech support. This work requires immense focus, and is most effective when done away from a raucous office environment. Even employee training on new HR technologies can be done virtually and without physically hovering over employees, when you have modern HR technologies. Punch clock kiosks are being replaced with employee self-service apps and virtual time clocks accessed by employees via mobile apps with multifactor authentication. Many training modules for employees can be completed online.
Talent Acquisition
People have very little patience with ineffective recruitment processes. Many candidates mentally check out as soon as the non-negotiable in-person interview is revealed. Other qualified candidate churn from the process when the ATS is poorly configured, applications are too long, or conference calls/virtual interviews experience debilitating technical issues. Job descriptions, sourcing, candidate management, and administering many job assessments can be done remotely and online. Effective phone screens and virtual interviews can be conducted by virtual Talent Acquisition professionals at different levels. In fact, the entire modern RPO (recruitment process outsourcing) industry is based around the concept of virtual recruitment services.
Strategic and Executive Level Work
Recognize the need for each function in your business to have governance and leadership to form and execute on the strategy – including IT, Sales, and HR. A company that is not large enough for a full-time HR executive, or requires interim HR leadership, can benefit from hiring a fractional HR executive. Many of these fractional (meaning, they work a fraction of the time of a full-time executive) HR leaders are former CHROs, Chief People Officers, and HR Directors you can hire work exclusively remotely. This allows them to extend their reach and manage multiple clients or home life effectively.
Some questions that people may have about virtual HR:
Now that we’ve explained the benefits of virtual HR, let’s tackle some questions your may have.
- What are the drawbacks of using virtual HR services?
- How can I minimize these drawbacks?
- How do I find a reputable virtual HR provider?
- How much does virtual HR cost?
- How do I get started with virtual HR?
Let’s approach these one-by-one.
What are drawbacks of virtual HR?
- HR professionals who spent most of their careers working in the office may not acclimate well to the remote work environment.
- Technical difficulties and internet outages may cause interruptions in service.
- Burnout risk from constant streams of digital communication is real. Research shows that 69% of remote workers report increased burnout from digital communication tools.
- It becomes more difficult to know when your virtual HR team members are being productive.
- Some employees demand face time with virtual HR service providers.
How Can I Minimize These Drawbacks?
If you’re considering using virtual HR services, there are a few things you should keep in mind:
- Make sure you choose a reputable provider with a proven track record of delivering effectively remotely.
- Be clear about your needs and expectations.
- Set clear communication channels and offline work protocols.
- Be open to eliminating or consolidating HR software. Your virtual HR providers should be making recommendations. Employees experience fatigue with constantly switching systems and user interfaces.
- Monitor the performance of the provider with key agreed upon measurements without attempting to micromanage, to make sure you’re getting the value you expect. Remember, they are contractors and trained professionals, not your employees.
- If there is a need for site visits, such as in the case of OSHA inspections or on-premises systems configuration, ensure it’s covered in the contract and frequency is predictable.
How do I find a reputable virtual HR provider?
- It’s best to take the agency approach. Why? Because like other administrative functions with virtual agency models such as accounting, marketing, and sales development, they have team members who have already been vetted, selected, trained, and onboarded based on their competence in doing the work virtually, and through internal innovations and repetition have found best practices and “what works.” An independent HR business partner may have had a career too narrowly defined to handle everything you intend to throw at them.
- Determine which at which level you need virtual services for. Do you need virtual HR assistants, experienced consultants, or a fractional HR executive? What area of specializations are needed (such as HR compliance, labor union relations, program managers, talent acquisition, or HR tech implementers)? Write it down like a laundry list and bring it to your short list as a requisition, to determine if they can handle it. They will be able to get you a quote, price list, or proposal much faster when they’re armed with that information.
- Ask around your network. But do not solicit recommendations from just anyone. Hopefully, not the advice of someone who perceives an outsourced virtual HR function as a threat to their jobs. Ideally, other busy business leaders with organizations around your size will have the best knowledge of which vendors to RFI, and which vendors to stay clear from.
- Ask around your HR tech partners. Do you already have a great HR tech company you work with for your HRIS, performance & recognition, payroll, or onboarding automation? If so, then it’s a good idea to ask them who they recommend. These companies usually have partner programs, and can identify a capable local partner (local being relative to whichever partner can deliver great virtual HR services and understands the context of your culture and region).
- Check out their reviews on sites which you’ll find info. Popular sites with listings, content, and reviews are Clutch, Google Maps (GMB), Facebook, and LinkedIn. You’ll get a good idea of their track records, industry focus, culture, and internal body of knowledge. Don’t stop there. Check them out on job sites such as Glassdoor to see what their employees think about them. If the employees don’t like the culture or believe in the products/services or CEO, you’re likely to get a similar experience.
- Do you want virtual HR, or an HR tech with great customer assistance? Are you looking for outsource your HR department, or get an EOR? You should ask these questions to ensure you don’t go down the wrong road. We’ve encountered many folks who thought they were getting a HRIS with dedicated virtual consultants, but the value from the “consulting services” and “business partners” never materialized, yet cost a hefty bit of change in a contract they got locked into. My recommendation here is to secure the services of a virtual HR agency, and they can perform analyses to select the right HR technologies which are right for your scale, budget, culture, and trajectory. If you selected well, they are also able to operate and optimize these systems, continuously.
How much does virtual HR cost?
Virtual HR costs can vary widely depending on the size of the company, the specific services required, number of hours required per period, customization level of services, and level of talent required to deliver services. Here’s a general breakdown:
- Consulting Services: If you’re hiring an external HR consultant or firm, costs can range from $100 to $300 per hour or more for experienced virtual HR professionals. Contracts will generally be structured as projects with time and materials components.
- Full-Service Virtual HR: Some companies offer comprehensive virtual HR services, and these can range from a few hundred to several thousand dollars per month. With this option, contracts may be a flat subscription fee, as a fixed price. Additional service add-ons may be available.
- Additional Costs: These might include costs for recruitment, training, compliance, and other specialized services. For example, a placement fee may be charged for hires, or an additional cost to implement or ramp up a specific product or service. Also, even though we are talking about virtual HR, an in-person component can be tacked on via contract change request, additional charge, or materials expense reimbursement.
For a more detailed and customized quote, it’s best to contact virtual HR providers directly.
How do I get started with virtual HR?
One you have made the decision, start preparing your organization for the organizational change.
First Challenges and Projects
Assess your current HR structure and organizational structure overall, identifying challenges you want the virtual HR folks to address. Then, provide that list of challenges to them ahead of kick-off. Share with them key employee documents, such as benefit plan documents, employee form templates, and the employee handbook. This ensures that they will already have a good idea of what initial vulnerabilities and opportunities for improvement there will be upon the commencement of their work.
Systems
Identify the tools and technologies they will need (such as Zapier, Google Workspace, or JazzHR), and determine how you want to procure their access for work. Gather documents they will need to understand how you interact with these systems, such as standard operating procedures.
Collaboration
Ahead of the virtual HR folks starting work with you, discuss the new arrangement with your team. Determine who will be the primary points of contact for the different areas in which they will collaborate. Determine how you will work together in the established communication channels, and if not addressed already in contract, the service level agreements (SLA) which determines their response times to inquiries.
The Virtual Future of HR is Now
Looking forward beyond 2023, you will want to source the best HR talent you can budget for, where they are available. Employers will not be constrained by limitations in location or remote capability. At Poprouser, we see the trend of individual service providers declining, and employment costs rising. We see HR departments shrinking. Virtual HR service agencies can be a great way for businesses to get the HR support, program management, and leadership they need without the high cost and overhead of hiring in-house HR professionals, and having them constrained to an office. If you’re looking for a flexible, cost-effective way to create or improve your HR function, virtual HR services are worth considering.
Do you Know? Poprouser is the Virtual HR & People Operations Services Provider.
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