Most companies’ main issues in the devasting COVID-19 crisis — aside from competing in shrinking economies — are likely employee productivity and safety. The combination of economic stress and human safety is unprecedented and volatile in terms of HR management. Not only do we have to deal with “normal” HR issues and compliance, but we also have to plan for maximum productivity while safeguarding our teams.
Maximizing flexibility, minimizing liability
Outsourcing is always the top go-to in challenging times. Although Professional Employer Organizations (PEO) and Employer of Record (EOR) are the “go-to” for growth planning in HR, they have become the new gold standard in the challenging HR environment of 2020 — especially in the current COVID-19 pandemic situation.
It would be fair to say the current crisis has created chaos in HR management. There are no more valuable assets now than HR expertise and flexibility. PEO and EOR outsourcing is the new gold standard for crisis HR management —such as Pivotal Solutions’ PEO or EOR services.
Why is it more important now than in non-crisis times? Companies already have a full red-alert situation during these difficult times, just staying in business, finding replacement revenue, keeping clients, and developing new opportunities. A PEO can help by taking care of the other volatile aspect of crisis: the human resources liabilities and responsibilities and compliance.
- To discuss how PEO or EOR can help your HR management during the COVID-19 crisis, reach out to Pivotal Solutions>>
Why growth and “crisis” are similar in terms of HR
HR management and planning require similar complex and nuanced expertise and tools in both crisis and growth situations. Depending on the situation, you could argue PEO and EOR are even more relevant in crisis. The critical difference is crisis tends to be volatile, fluctuating rapidly up and down, while growth is more predictable.
The very nature of the crisis — turbulence and unpredictability — are the reasons why many companies are outsourcing in 2020, and not just PEO and EOR, but outsourced HR Management.
Some companies, for example, are faced with devastating cutbacks. Other companies, in essential services, may find themselves in need of rapid growth. Whether growing or down-sizing, volatility is inevitable in a crisis environment.
PEO and EOR outsource risk, workload, and compliance
PEO’s significant advantages during “growth” initiatives aren’t necessarily all the same during crisis times — although risk, workload, and compliance are certainly shared advantages. For example, during growth times, compliant onboarding and workload balancing might be significant advantages. In a crisis, they might still be necessary, but the emphasis becomes:
- reduction in headcounts
- urgent freezes
- sudden increased demand as cycles improve
- termination processes
During “good times,” there is less volatility, and most of the anticipated changes are “upwards” momentum. A crisis is much more dynamic.
Advantages of PEO in COVID-19 climate
PEO can undoubtedly be a significant advantage when you are confronted with:
- involuntary HR changes
- challenging compliance rules changes as governments try to protect both workers and employers
- managing unpredictable workflows
- recruitment freezes
- sudden HR demands as opportunities for recovery arise
- HR can be more easily expensed
- Sourcing new HR resources to help manage the crisis
- Dealing with cross-border compliance — which has increased in complexity
- Handling terminations, which can remove one extra burden from the company in crisis-mode
- Assisting with new rules, such as travel exemptions (where applicable)
Changing laws and compliance
Crisis inevitably brings changes in legislation and terms of employment. In moves to protect employees, rules for employers change. When can you terminate? When can you layoff? What are the redundancy options? What support do you provide for people working from home? What if someone is sick?
Even though it is challenging, especially with many work-places downsized, your compliance obligations with the changing laws remains a critical aspect of your HR management. A PEO, such as Pivotal PEO teams, have payroll specialists and experts in the latest changing laws.