How Much Does A New HR Manager Cost?

Outsource….hire….no, outsource ….no, hire. Business owners struggle with this dilemma nearly every day of their working lives!

If you’re to the point where HR tasks are piling up, higher than the eye can see, you’re probably ready to bring on an HR Manager…someone you can offload these non-revenue generating activities to. But wait a minute, how much does an HR Manager actually cost?

Salary.com states that the median expected salary for a typical Human Resources Manager in the United States is $88,408. Glassdoor.com puts that number at around $80,000. Either way, it is important to note that many factors directly affect an HR Manager’s responsibilities and workload – therefore affecting what the appropriate salary at your organization will be. How many employees will the HR Manager oversee? Will they work on their own or will they work alongside another employee such as the office manager? What type of education or training will be necessary to adequately serve your business?

Here’s something to consider: While bringing on an HR Manager will keep things in-house and certainly decrease the amount of time you personally waste each day on tasks that do not generate revenue, you are probably STILL going to need to outsource certain aspects of your business that fall under “HR” including payroll, benefits, and workers compensation.

An HR Manager will absolutely assist your business, but will he or she cost more than what their services are worth? Don’t forget that fulltime employees typically come with the added expense of employee benefits.

Most large companies that are in “employee management overload” will argue yes, an HR Manager is absolutely necessary and the cost of hiring is justifiable; management can generate a lot more sales (totaling more than that HR Manager’s salary) if they themselves aren’t focusing on non-revenue generating tasks. But, for the small to medium sized business owner, the expense of hiring fulltime, knowing that you’ll still need to outsource various aspects of HR, is quite daunting. Many choose to stay put in their frustrations, wearing their HR hat along with many other hats.

Are you that person? Wearing too many hats but not in a position to hire? If so, have you ever considered a PEO? Through the co-employment relationship a PEO will become the legal employer of your staff and handle all the payroll, benefits and HR functions. Outsourcing, well yes, but it’s all through one convenient relationship!

Like all professional services, PEO prices vary depending on the company. But, in most instances, a PEO relationship will cost you less than a fulltime HR Manager, and, you won’t have to deal with the headache of managing multiple vendors anymore. All of your HR functions are under one roof. PEO prices range between 2 and 10 percent of wages. For very small companies (less than 5 employees) some PEOs may charge a flat fee per month.

What option is best for you? You won’t know until you’ve got a side by side comparison based on your wants, needs, and budget! Contact Employer Solutions Plus if you’re interested in learning more about the PEO relationship and its costs!