Value of HR and benefits expertise trickles down market

Many companies across diverse industries are grappling with HR and employee benefits issues along today's ever-evolving business landscape to regain a competitive edge amid tightening labor markets.  

Questions about fair compensation, total rewards, effective policies for employee retention and resolving complex personnel matters are at the forefront of their concerns. Some may even be facing challenges with specific employees and seek assistance in navigating these situations. The quest for an exceptional payroll and performance management platform has become paramount.

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Contrary to popular belief, it's not just high-tech or manufacturing firms that are investing significant resources in enhancing these capabilities. In 2024, non-traditional companies are increasingly recognizing the transformative potential of strong HR and benefits practices. Many of these organizations are turning to brokerage or advisory firms or fractional HR and benefits teams for support. By engaging with these external resources on a part-time or as-needed basis, smaller enterprises can leverage expert HR and benefits knowledge without the financial burden of hiring a full-time HR staff member.

This emerging trend signifies a shift in the types of companies prioritizing and mainstreaming robust HR and benefits services. It also bodes well for consultants who are looking to expand their reach. These companies vary in size, ranging from 15 to 100 employees, but share a common goal: employee retention. It comes on the heels of so-called quiet quitting, the Great Resignation and persistent labor shortages across the economy marked by scores of Baby Boomer retirements and working mothers who exited the workforce to focus on their families. 

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After investing time and resources in post-pandemic recruitment efforts, they are now focused on retaining and nurturing their talent pool. To achieve this, they recognize the importance of implementing programs that promote retention.

Key concerns for these companies include ensuring compliance with pay standards, such as those outlined in the Fair Labor Standards Act (FLSA), navigating evolving regulations on pay transparency and exploring the potential of AI in HR operations. Additionally, they are evaluating the adoption of performance management platforms to facilitate employee growth and development.

What's particularly noteworthy is the diversity of industries seeking HR support today. From animal shelters to start-ups, organ donation companies to real estate firms, and even churches to office furniture suppliers, a wide array of non-traditional businesses are recognizing the value of effective HR and benefits practices. In the past, such organizations may have overlooked the importance of these processes, leading to high turnover rates and inefficiencies in recruitment and training. However, as the demands of the workforce evolve, they now understand that cultivating a positive culture and efficient processes can lead to greater employee retention and reduced hiring costs.

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Furthermore, the allure of large corporations has diminished in the wake of the pandemic. Many individuals now seek employment in organizations with a more inclusive culture and flexible work arrangements, such as hybrid or remote options. This shift in preferences has opened doors for smaller, more agile companies to attract and retain top talent.

Whatever the future holds, the increasing recognition of the pivotal role that HR and benefits play in organizational success is driving non-traditional companies to invest in improving these capabilities. By prioritizing employee retention, navigating regulatory challenges and fostering a positive workplace culture, organizations are positioning themselves for sustained growth and competitiveness in today's dynamic business environment.