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Real estate firms opt to outsource human resources

Dennis McCormick

Running a successful real estate company in today's competitive marketplace is a challenging task that takes skill, determination and insight.

It also requires time but, despite technological advances, many owners still find it extremely challenging to grow the company, while handling day-to-day operations.

The most successful real estate companies have learned that outsourcing certain business functions not only frees up time, but can also improve processes by infusing market-driven passion and discipline into areas that had previously languished. It also empowers the company to further develop and meet its own business objectives while creating operational excellence.

One area in which real estate firms are outsourcing is in the area of human resources (HR). By transferring HR responsibilities to professionals who focus exclusively on these matters all day, every day, owners can redirect their energies to their own business, whether it's new development, financial services, architecture and design, property management, brokerage, real estate consulting or some other aspect of the industry.

This is where a professional employer organization (PEO) comes into play. A PEO serves as an HR department that manages daily administrative needs such as payroll processing and related tax filings, employee benefits management and workers' compensation coverage and claims resolution. In addition, since PEOs have the advantage of volume buying power, they are able to offer employees of small and medium-sized firms a comprehensive benefits package that can include health, dental and vision coverage, a prescription drug program, and short and long-term disability insurance that they may not otherwise access.

Full-service PEOs typically also provide employer liability management, some government compliance, training and development, and recruiting and selection assistance as part of their total service offering. Firm owners benefit by entering into a co-employment relationship with a PEO allowing them to focus on more profitable and productive tasks--like finding new customers and retaining existing ones--while the PEO handles the time-consuming HR-related activities.

In a co-employment relationship, a company can transfer many of its employer liabilities to the PEO, share others and better manage those that remain. The result is lower risk and reduced liability--a key to safeguarding the firm.

A strong training and development program is an essential component of an effective retention strategy. Employees want to know they can learn, grow and develop professionally.

A full-service PEO helps a firm identify the right people for the right jobs. Focused recruiting and selection services include writing job descriptions, placing ads, reviewing resumes, interviewing, and conducting background checks and pre-employment testing. Some PEOs also handle outplacement if it becomes necessary.

There are a number of reasons why real estate companies outsource their HR, the first of which is to help reduce and control operating costs. By using a PEO, companies can save on overhead and redirect capital funds to core areas. Companies can also gain specialized knowledge on topics ranging from employee retention to workers' compensation issues and the Family and Medical Leave Act. And perhaps most importantly, PEOs help mitigate a company's risks.

Staying ahead of the competition is hard enough without the crushing weight of employment-related paperwork, the constant flux of workplace rules and regulations, and ongoing hassles with benefits management. A super real estate team needs a super support staff. And with a PEO on board, your team can concentrate on being fast, focused and ahead of the game.

BY DENNIS MCCORMICK AND SAL GERVASI, NEW YORK DISTRICT MANAGERS ADMINISTAFF

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