In this highly competitive market environment, it is imperative that companies adapt and adjust to foresee able future challenges.  This requires them to focus on their core competency, rather than dividing their attention in allied processes such as human resource management. Thus, recruitment process become an emerging trend which significantly helps companies improve their efficiency.  The recruitment process outsourcing is a part of business process where all or some of the functions of the recruitment process of the company are taken care by professional third party vendors.

With the availability of a large pool of well qualified candidates, it may seem that recruiting would be easier.  However the reality is that whenever an opening is announced the response  can get overwhelming and companies are flooded with  applications which makes it  challenging  for the company recruiters to find the right candidate for the of job with their given timeframe. In this case it would be beneficial to completely outsource the recruitment process to third party vendors that have expertise in this area. It streamlines the process, and allows the company to focus more on revenue generating activities.

Through outsourcing the recruitment process, the companies are able to fill the positions they need without adding strain to the workload of their existing HR department or hire a dedicated employee for this task.  By outsourcing, it becomes the vendor’s job to meet the criteria set out by the company in screening applicants and ensuring that the candidates that are scheduled for interviews have the qualifications and the right personality that not only fits the job but the company culture as well.  Companies benefit from this tremendously from a cost-saving perspective as such they only have to pay for when they need the service as opposed paying for a full time salaried dedicated worker even when the demand isn’t there.  Recruitment outsourcing can be your company’s most valuable tool in making sure that your employment needs are met within your time frame at low costs.

Is the Employee Eligible for Unemployment Benefits?

Employees are eligible for unemployment benefits only if they are out of work through no fault of their own. This rule works differently depending on whether the employee quit, was laid off, or was fired.

If an Employee Was Laid Off

An employee who loses a job through a layoff or reduction in workforce is always eligible for unemployment benefits.

If an Employee Was Fired

Fired employees can claim unemployment benefits if they were terminated because of financial cutbacks or because they were not a good fit for the job for which they were hired. They can also receive unemployment benefits if the employer had a good reason to fire the employee, such as being late for work several times, but the infractions were relatively minor, unintentional, or isolated.

On the other hand, in most states an employee who is fired for misconduct will not receive unemployment benefits. Although you might think that any action that leads to termination should constitute misconduct, the unemployment laws don’t look at it that way. Not all actions that result in termination are serious enough to qualify as misconduct and justify denying benefits to a terminated worker.

What qualifies as misconduct that will disqualify an employee from receiving unemployment benefits? Generally speaking, an employee engages in misconduct by willfully doing something that substantially injures the company’s interests. For example, revealing trade secrets or sexually harassing coworkers is typically the type of misconduct that renders the employee ineligible to collect unemployment benefits. Other common types of disqualifying misconduct include chronic tardiness, numerous unexcused absences, extreme insubordination, intoxication on the job, and dishonesty.

Common actions that often result in firing — but do not constitute misconduct — include poor performance because of lack of skills, good faith errors in judgment, inefficient work habits, an unpleasant personality, poor relations with coworkers, or off-work conduct that does not have an impact on the employer’s interests. An employee fired for any of these reasons will usually be allowed to collect unemployment benefits.

It is important to remember that what qualifies as misconduct is a matter of interpretation and degree. Annoying one coworker might not be considered misconduct that will disqualify an employee from receiving unemployment benefits, but intentionally engaging in actions that anger an entire department, even after repeated warnings, might be considered disqualifying misconduct.

If an Employee Quits

An employee who quits or resigns from a job will be eligible for benefits only if the employee resigned for “good cause.” A good reason for quitting a job, such as job dissatisfaction, is not necessarily good cause. The law requires the employee’s reason for leaving to be “compelling” — that is, the worker would have suffered some sort of harm or injury by staying. Put another way, the reason the employee left must be the sort that would have made any reasonable person leave.

If an employee leaves a job because of intolerable working conditions (such as being sexually harassed) or because of being offered the opportunity to quit in lieu of being fired, most states would allow the worker to collect unemployment benefits. Similarly, leaving a job because it poses a serious threat to the worker’s health or safety is usually good cause. On the other hand, most states would not accept leaving a job because it doesn’t offer opportunities for career advancement as a good cause, and it won’t make a worker eligible for unemployment benefits.

Should Your Company Contest the Claim?

Your state’s unemployment office — not your company — will ultimately decide whether a former employee can receive unemployment benefits. You do, however, have the option of contesting an employee’s application for unemployment benefits, and that option gives your company a great deal of power. In California, for example, the unemployment board presumes that a terminated employee did not engage in misconduct that would disqualify the employee from getting unemployment benefits unless the employer contests the unemployment claim. Thus, in California, terminated employees who claim unemployment benefits receive them unless the former employer contests the claim.

Remember, there is no reason — and there are no grounds — to contest an unemployment claim if the employee was laid off. There are also no grounds to contest the claim if the employee did not engage in misconduct but was fired for lesser reasons — for instance, for sloppy work, carelessness, poor judgment, or the inability to learn new skills.

Even if an employee engages in misconduct, your company might want to give up its right to contest an unemployment insurance claim as part of a severance package, especially if the fired employee seems likely to sue. In other words, your company would agree not to contest unemployment benefits and the employee would agree not to sue your company.

Your company should contest a claim only if it has grounds to do so — meaning that the employee engaged in serious misconduct or quit without a compelling reason. And even then, your company should also have a good, practical reason to contest. Employers typically fight unemployment claims for one of two reasons:

• The employer is concerned that their unemployment insurance rates may increase. After all, the employer (not the employee) pays for unemployment insurance. The amount the employer pays toward unemployment insurance is based in part on the number of claims made against the employer by former employees.
• The employer is concerned that the employee plans to file a wrongful termination action. The unemployment application process can be valuable in discovering the employee’s side of the story, and it can also provide an excellent opportunity for gathering evidence — both from the employee and from witnesses.

If your company plans to contest an unemployment compensation claim, proceed with caution. These battles not only cost time and money, but they also ensure that the former employee will become an enemy. The employee might even file a wrongful termination lawsuit that otherwise could have been avoided. And if the fired worker has friends who remain on the job, they too may doubt and distrust your company’s tactics.

Before making any decisions, you might want to do some research by contacting your state’s unemployment office for specific information about the law in your state. This office can tell you what effect a successful unemployment benefit claim will have on your company’s rates. If it’s relatively small, backing off might be a good idea.

For more information about unemployment benefits, and other human resources issues, see The Manager’s Legal Handbook, by Amy DelPo and Lisa Guerin (Nolo).

by: Lisa Guerin, J.D.

Small-business owners are all too familiar with  frustration of spending more time than they want or should on non-revenue-generating activities. Dealing with payroll alone on top of all the various other human resources services such as benefits comoensations, could easily have them spend ing at least 40 percent of their precious day engaged in these necessary but time-consuming tasks. 

The solution  for many of these  growing companies may be to hire a professional employer organizations (PEOs). These companies become the legal employer of your staff and handle all the payroll, benefits and HR functions. The multitude of options that a Human Resource services provider can help tremendously with easing the burden for the business owners.

According to a statement by MIlan Yager,president and CEO of the National Association of Professional Employer Organization  ” Most small businesses are under 25 employees, and that means the owner is the most productive, is critical to the success of the business, and has to get out there and generate sales and products,”When small businesses outsource non-core activities, “they can focus on the business of their business”.

The question is, when does it make sense to go with a PEO? PEO‘s are definitely not a one size fits all deal, it isnt for every company. However those that dodo use them can often offer better benefit packages and thus hire better talent. 

To determine whether or not you should hire PEO or simply outsource some but not all of your HR, there are several things  to consider before you making  a decision:

• The Size of your Company:   Expert opinion varies on how large a company should be before it hires a PEO. A general rule of thumb is “when administrative processes begin slowing down the productivity of the firm,” says Dan Sheridan, president and chief operating officer of Extensis, a PEO. While it is different for every company, “this typically occurs when a business reaches 10 to 15 employees a week,” says Sheridan.
• What its going to cost compare to your current expense: Like all professional services, the way a PEO prices services varies depending on the company. Industry experts estimate that the cost ranges from about 2 percent to 11 percent of wages. Another way to look at the expense is per employee. With that measure, it would run between $500 and $1,500 per employee per year. For very small companies with only two to five employees, some PEOs might price their services at a flat fee of $150 per month.
  On the flip side, it is important to try and estimate the total cost of your HR functions. Truth is, most businesses “have no idea what their true costs are, as they only think of wages but never add up all the other things,” says Yager.
• Control:  How  much control over HR do you want? The PEO acts as a business partner to the client company. If a business owner wants to control all aspects of a business and is not open to suggestions or following through on recommendations a PEO makes, then a PEO may not be the best fit. It migh make more sense to just outsource some of it in an ASO set up.
• Businesses do lose a bit of flexibility in the coverage they can offer when they use a PEO. Related to the issue of control is the perception of your employees. “Employees are used to seeing [your business name] on the check,” and the PEO becomes the check signer, says Sweeney.
• Services your Organization needs:  Choosing  the right PEO is of paramount importance, the PEO should have the necessary credentials and certificationshave experience in the client’s industry and cover that company’s territory, and assess their specialization. Some PEOs specialize in a Web-based high-tech approach, while others are focused on face-to-face support.

In a recent study by The Economist Intelligence Unit, that senior executives around the world rated their HR departments as the worst performing department in their business. Why was this the case? What was the biggest contributor to this?

HR executives were being bogged down with all their administrative tasks that they didn’t have time to look at the big picture and work towards the goals of the company.

With the findings in hand, HR professionals have realized outsourcing administrative tasks such as payroll and benefits administration have increased employee performance and company profitability.

Typical outsourcing can include any or all of the following:

• Payroll services

• Employee Benefits

• Accounts Receivable and Payable

Employers must first determine if the employee will be an independent contractor or w-2 employee. Issues such as tax withholding from employee paychecks and liability may be implicated by this decision. There are federal and state guidelines to determine whether workers are independent contractors or w-2 employees.

        As a w-2 employee, employers will need to obtain federal and state employer identification numbers, which are used for tax purposes. Employers will be required to participate in a worker’s compensation insurance pool for Maryland hires.

        Compliance with immigration status by obtaining certain documents from the potential employee is required by you the employer. Employers need to also ensure that the employee properly completes forms for federal and state tax withholdings. Information on payments required to satisfy child support or alimony awards should also be gathered, where applicable. Some additional requirements may apply, so be sure to check accordingly with your state.