Finding the right fit while searching for Fractional HR support can be as tricky as it is important. To ensure a successful engagement, you must be strategic and thorough during the selection process. Knowing what traits to look for can make all the difference.
Your search must balance out multiple factors such as experience in your industry, knowledge of nuanced compliance regulations, and of course, cost savings when compared to hiring internal HR representatives – all while considering how their contributions will support your larger corporate mission.
This requires an agile shortlisting process that is detail-oriented and considers long-term goals and milestone achievements throughout your time working together.
You need to find a professional with an unbiased point of view, years of experience, and knowledge of current regulations, which can make all the difference when tackling complex tasks.
For Example: Helping you set up a customized online HR and payroll platform is easier with the assistance of an individual who holds relevant HR-specific certifications, has peak-time availability, can communicate clearly, and promptly respond to questions.
We know it sounds like a tall order, but that's why we're here to support you on your journey. In this article, we'll explore what qualities to look for when selecting Fractional HR support that fits or partners optimally with your existing organizational structure and how these characteristics will benefit your company in the long run.
Trait #1: Experience in The Nuances of Your Industry
Today, businesses and organizations face tremendous risk as local, state, and federal laws demand compliance with an ever-evolving spectrum of regulations. Even small errors on something like a form I-9 can have haunting effects on a business's financial well-being. Considering just this year (2023), the United States Department of Labor is awarding more than $700,000 in back wages and damages to 470 employees recovered from a Glendale plastering company following an investigation and lawsuit related to the employer’s pay practices.
If you want to ensure you are compliant and are interested in customized HR solutions that can provide the best guidance on personnel issues that may arise - finding Fractional HR support with experience in your industry is essential for effective operations.
Their first-hand knowledge will provide valuable insight into the nuances and complexities of running a business and enable them to create compliant custom policies and offer guidance when personnel issues arise. Industry expertise also gives perspective to hiring processes or navigating complex scenarios like disciplinary action, so you have clarity on the type of behavior that's typical and expected from employees within your field.
Furthermore, by knowing typical job roles within your industry, these advisors can make your recruiting efforts more efficient by creating effective job postings that excite the talent you're after to apply for your open role.
Plus, having an up-to-date understanding of the relevant regulations is essential for protecting your business from unanticipated problems down the road – more on this next!
Key Takeaway: Fractional HR support should have the industry experience to ensure compliance with applicable laws, guide decision-making processes, and make recruiting efforts more efficient. Key elements include: understanding the nuances of the business, knowledge of current regulations and laws, expectations for employee behavior, and typical job roles within the industry.
Trait #2: Understanding of Current Compliance Regulations in Your Industry
Navigating today's HR landscape can be an incredibly difficult task for employers. With constantly changing laws and regulations, it's all too easy to miss something small that will cost you dearly in the form of hefty compliance fines (ask Google – they got hit with a $2.7 billion bill). That's why many companies are beginning to seek out Fractional HR Advisors to help them maintain compliance so they don't end up getting stung financially! Good advice is always worth its weight in gold - after all, no one has pockets deep enough these days to pay the types of non-compliance penalties Google did…
For Example: Let's say you have a restaurant franchise based in California that's working with a Fractional HR expert. They should prioritize keeping up to date with any new policies since it would directly impact your HR operations, like California's recent minimum wage law update, which requires employers to pay employees at least $15.50 per hour (as of January 1, 2023). This law applies regardless of how many hours an employee works or what type of job they have.
Additionally, all employers operating within the state must adhere to other labor standards, such as meal and rest breaks. By understanding these labor policies, a Fractional HR resource can help ensure compliance and avoid costly fines or penalties for non-compliance for your company.
Companies that adopt a human-centered approach to business by following compliance regulations see a 32% lift in revenue, deliver outcomes to their market 2x faster, and outperform the S&P by 211%.
Fractional HR leaders need to be aware of federal laws such as:
Title VII of the Civil Rights Act: Prohibits discrimination based on race, color, religion, sex, or national origin.
The Americans With Disabilities Act (ADA): Protects individuals with disabilities from discrimination.
The Age Discrimination In Employment Act (ADEA): Prevents age discrimination against those 40 and over.
The Family Medical Leave Act (FMLA): Provides eligible employees with up to 12 weeks of unpaid leave each year due to certain medical conditions or family emergencies.
In addition to staying informed, Fractional HR support should regularly scan and review any relevant case law or current proposed legislation that could impact their organization's policies or procedures. By doing so, they can remain proactive in protecting you (their client) from potential liabilities associated with non-compliance issues before they arise rather than trying to react after something has gone wrong.
Consider the case of an IT employee who was awarded nearly $103,000 plus 100% liquidated damages, attorney's fees, and prejudgment interest for violations of the federal Family and Medical Leave Act. This ended up costing the employer $536,000 when it was all over. No one wants to deal with regulatory or compliance headaches when they could have been avoided, and a Fractional HR Advisor can help.
Key Takeaway: Fractional HR support must prioritize staying current on relevant legislative policies related to their client's industry, such as minimum wage laws, FLSA, Title VII of the Civil Rights Act, ADA, and FMLA. They should also regularly review any relevant case law that could affect their clients' policies or procedures to remain proactive in protecting them from potential liabilities associated with non-compliance.
Trait #3: An Unbiased Point of View
Personnel decisions are most effective when objective, factual judgments prevail; this is why Fractional HR professionals need an unbiased point of view. Stripping away personal biases and focusing on the data and facts can provide a solution that serves everyone's best interests—not just their own opinion.
For Example: When tasked with considering whether or not to hire a new employee, Fractional HR experts should be able to look at all available information without any preconceived notions about who would be better suited for the job. They should also consider factors such as experience level, qualifications, cultural fit within the organization, and other relevant criteria that may affect their decision-making process. Additionally, they should consider how this person will contribute towards achieving organizational goals and objectives in both short-term and long-term scenarios.
No one individual must receive preferential treatment over another during the recruiting and selection process so that there is no risk of discrimination claims being filed against your business later down the line.
After all, here is an example where despite their best intentions, both male and female scientists trained in objective hiring practices were found to inadvertently display a strong bias towards selecting men over women candidates. Even more astounding was the amount of money they were willing to offer - an average difference of $4K annually! The results left participants shocked that unconscious biases can remain so pervasive despite our efforts for impartiality. Pay equity and pay transparency are two topics that are touching just about every state at this point.
Fractional HR support must also remain impartial when tasked with dealing with termination cases involving employees for your company. In these scenarios, it is essential that they work with your internal team to help outline the documentation needed and that any progressive disciplinary processes were followed to help substantiate the employee attrition. Different states have different final pay requirements, so lean into an HR professional to help you handle these situations effectively.
Overall, having an unbiased point of view is critical for all HR professionals, not just fractional roles, since it allows them to make informed decisions based on facts rather than personal preferences or professional 'favors,' which could lead your business down a path you weren't expecting or prepared for otherwise.
Key Takeaway: Fractional HR support must remain impartial when making decisions or when tasked with a project and provide equal opportunities to all parties involved. This includes looking at all available information objectively, considering relevant criteria such as experience level and cultural fit, following a disciplinary process and documenting details in cases of terminations, and providing other support services as needed.
Trait #4: Their HR-Specific Certifications
Not certified? Don't hire them. Choosing the right Fractional HR services provider is vital to successful engagement. Without verified professional certifications, you may miss out on what a genuine HR professional offers.
To help, we've gone ahead and highlighted the top two credentials we require our own Fractional HR providers to hold to ensure the best service for our clients:
#1 Society for Human Resource Management Certified Professional (SHRM-CP):
The SHRM-CP® is recognized internationally by employers across all industries as the premiere human resources certification. Focusing on a core set of competencies outlined in the Body of Applied Skills and Knowledge™ (SHRM BASK™), this first-ever behavioral-based credential provides lifelong development opportunities for HR professionals throughout their career journey. Backed by the world's largest HR membership organization - The Society for Human Resource Management - they have successfully supported over 100,000 organizations since its launch.
The SHRM-CP® demonstrates competency and mastery of the fundamental HR functions: employee and labor relations; recruitment, selection, and staffing; compensation and benefits design; total rewards program management; training and development; performance management systems for employees' individual growth; HR operations, development, and strategy. Plus, so much more.
#2 The Certified Professional in Human Resources (PHR):
Boasting 145,000 certified members worldwide and comprised of Education, Experience, and Examination components – The Certified Professional in Human Resources (PHR), offered by the Human Resource Certification Institute (HRCI), is a credential that requires applicants to demonstrate their mastery of the knowledge and competencies necessary to excel as a human resource professional.
The PHR has established standards for the practice of HR that are accepted throughout the world across all sectors. It is designed to measure a person's competence in understanding, interpreting, and applying principles of human resource management, including employment regulation; compensation and benefits; employee and labor relations; HR operations, development, and strategy, to name a few.
Trait #5: A Willingness to Work Collaboratively with You (& Other Departments)
The ability and willingness to embrace collaboration between organization departments when needed are essential to any successful Fractional HR support role. If the project calls for it, working alongside other teams brings ideas to life more quickly via improved communication, resulting in increased efficiency and productivity. It encourages creativity by opening up new perspectives on different projects or initiatives - unlocking opportunities for innovation that wouldn't otherwise be possible.
Furthermore, they must be able to recognize potential conflicts between teams before they arise and work towards resolving them quickly and efficiently while maintaining a professional attitude throughout the process. Electronic onboarding is an area that can touch multiple departments within an organization, so looking to streamline and optimize the process to be efficient yet professional is imperative.
For Example: A survey conducted by Gallup cited 88% of organizations struggle with onboarding. If your business has this issue, a Fractional HR Advisor who knows how to maneuver the complexities and open-mindedly consider new approaches from other departments would prove invaluable.
Plus, with modern payroll and HR technology, mundane tasks can be automated to reduce manual data entry and human errors. Utilizing web-based secure forms helps to minimize the time and effort required for recording and processing data. Moreover, advanced AI-powered tools are also now being used by businesses to improve the accuracy and speed of onboarding. Studies have shown that companies can reduce onboarding times by up to 50% by using these tools. Companies are looking to move away from paper to a paperless approach which is also better for the environment.
Key Takeaway: A Fractional HR Advisor must be willing to work collaboratively with other departments, recognizing potential conflicts before they arise and resolving them quickly and efficiently to ensure success for everyone involved. They should also be open-minded to new ideas and approaches suggested by the other departments involved.
With isolved Onboarding and Offboarding, the paperless employee onboarding tool notifies new hires of actions they need to take to complete onboarding and promptly alerts the appropriate personnel to take them through all the necessary steps, tasks, and forms to complete. Streamline the onboarding workflow and allow any new hire to enter information directly into isolved, avoiding multiple data entries.
Trait #6: An Unwavering Commitment to Data Security
Over one-fifth (21%) of HR leaders cited concerns over the security of critical HR data stored on the cloud as a top technology challenge. A commitment to your company's data security is crucial to any Fractional HR professional's role. It is essential that confidential information, such as employee records and payroll data, remain secure at all times.
This is where an all-in-one, cloud-based human capital management platform comes in handy. Your company records will be tied to an intelligently connected platform that delivers a 'single source of truth' for your employees' information behind state-of-the-art data security measures. Plus, a platform like isolved People Cloud will provide security no matter how long you need to keep your employee records according to regulations.
Suppose you're not using a secure HR platform. In that case, your Fractional HR Advisor must ensure your sensitive personnel data is safe by working with you on implementing appropriate measures such as encryption, access control, and regular backups of your personal systems and data. They would work with you to review document retention guidelines and confirm your process is compliant.
Key Takeaway: Fractional HR Advisors must take measures to ensure the safety of confidential data and will work with you to make sure your documents are retained for the proper length of time and secure. They should also be aware of your industry's data security and privacy regulations.
Trait #7: Ability to Help You Optimize Your HR Processes for Maximum ROI
That means 22% of companies are wasting valuable time on manual, tedious HR processes and wasting money. If you're a part of that 22% or need to optimize your existing HR tech stack, Fractional HR support can help you set up and optimize an all-in-one platform that serves as your single source of truth for all employee data. Look for a Fractional HR resource that can support you with HR compliance and help you get the most out of your HCM platform.
A Fractional HR professional can help you streamline critical HR tasks, such as:
By having a Fractional HR Advisor on your team, you can save time and money on labor costs while maximizing ROI from your HR technology investments. You'll be able to create a well-structured technology stack with all the necessary tools for your modern HR operation. Plus, with increased efficiency and access to comprehensive analytics and reporting, you'll be able to improve employee engagement and make better-informed data-driven decisions.
A side note for if you choose to implement a new HR platform:
Don't let vendor regret to derail your progress. When selecting a new HR platform, don't just think short-term - assess it holistically across multiple dimensions and take the long view with subscription terms that cover years to come.
Consider the self-service processes and applications your employees and managers use most often. Also, assess each vendor's cost to ROI, user experience, integration with your current technology stack, references and history of client satisfaction, technology architecture, and available tools, commitment to continuously improving the platform through a product roadmap, alignment with your culture, known capabilities for future expansion efforts, and the ability to track applicants in your recruiting process in light of today's tight market for talent.
Key Takeaway: A Fractional HR Advisor can help you optimize your current HR processes for maximum ROI. Ensure that any technology solution you choose is able to holistically meet the needs of your business now and in the future while also providing an excellent user experience, integration with your current technology stack, a commitment to improving the platform through product roadmap initiatives, alignment with company culture and capabilities for future expansion efforts if needed.
FAQs in Relation to Fractional HR Support
What is Fractional HR?
Fractional HR is a type of Human Resources service that provides businesses with access to experienced HR professionals on an ongoing basis at a support level that works for their company and their pocketbook. It allows companies to benefit from the expertise and knowledge of an experienced HR person without committing to hiring them full-time.
This can be especially beneficial for small businesses that may not have the resources or budget for a dedicated Human Resources Department but still need assistance in recruiting processes, onboarding programs, developing employee training, creating and implementing compliance-specific procedures, and so on much more. Fractional Human Resources professionals can also help larger companies save time and money by serving as an extension of their HR team to ensure compliance with all applicable laws and regulations in a specific industry.
How can companies benefit from Fractional HR services?
Companies that use Fractional HR services unlock the powerful combination of expertise and flexibility. With access to an experienced senior-level perspective, they can create customized policies tailored to their unique needs. On top of this invaluable insight into how outside factors may affect workforce strategy over time, businesses can rest easy knowing costs associated with expert HR advice remain in check thanks to limited hours worked each month - a strategic approach sure to yield better results down the road.
What services does Fractional HR support usually provide?
Fractional providers typically cover a broad spectrum of topics related to Human Resources department management, including:
Salary Benchmarking and Compensation Data
Leadership Coaching, Change Management, and Team Development
Performance Management Process
Compliance with Local Labor Laws
Risk Assessment/Management Planning
Moreover, they may also provide HR consultation services on strategic initiatives that can span all company sizes and industries.
How much do Fractional HR services usually cost?
Fractional HR services can be a great solution if you're looking for top-tier human resources support without breaking the bank. With salaries of Human Resources Managers in the United States averaging $115,105 and HR specialists averaging $62,544 in 2023 – it's easy to see why hiring professionals fractionally may be more palatable. When evaluating a new Fractional HR partner, ensure that you ask and agree to payment terms before your contract starts and know how many clients those professionals are supporting at any one time.
When sourcing Fractional HR support, seven essential traits should be taken into consideration:
Ultimately, by considering all these traits when looking for a Fractional HR professional or firm, you can help ensure that you hire someone who will meet your needs and expectations.
At PNI•HCM, we understand that managing a successful business requires reliable and efficient HR services.
That's why we offer Fractional HR solutions from our Payroll Network HR Advisor Team to help you manage your workforce more efficiently without needing an in-house team of professionals or the additional costs associated with them. With our experienced staff, cutting-edge technology powered by isolved, and a comprehensive range of HR support services, our team can provide everything you need to ensure your organization gets the most out of its resources while staying compliant with local regulations.
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