If you have ever worked for a corporation in which there were branches or corporate stores in several states, you have probably been introduced to the way in which centralized HR functions. Perhaps the best example would be in the fast-food industry where the first few days on the job, the onboarding process, is standardized.
You will be seated in a room where you can watch videos, read employee handbooks, and be introduced to the company way of doing things. If you’ve ever worked at a Waffle House, you know exactly what that’s like. If you are branching out with locations scattered around the country, this is a model you can learn from. It all begins with a central HR team, so let’s take it from there.
By its very name, Human Resources has to do with everything related to human capital within an organization. That being the case, anything that has to do with the people who comprise a company falls within the ‘jurisdiction’ of HR. Therefore, since it is but one company with several locations, everything within HR needs to be standardized. From onboarding to termination, everything that remotely has to do with the people who technically are the company is overseen by the HR team.
However, how can it be assured that every location is following company policy and the company way of doing things? This is where a standardized HR assessment checklist is of vital importance. This particular checklist doesn’t assess the staff but rather if HR is working effectively. Are the procedures they’ve instituted able to be followed in all stores or do they need to make a few exceptions or allowances for regional differences?
Also, this is why one central HR department is necessary. If every location made their own rules and checklists to follow during the assessment period, they might as well all be different companies. Nonetheless, this is just the first very important reason for a central HR team. It is also why many companies with several branches outsource their HR duties. It is much easier to standardize things if an experienced HR team understands the assessment process and ways to tweak it to make operations more effective.
2. Company Culture
Looking once more to Waffle House, this is a company with more than 2,000 locations predominantly in the Southern states. Their company culture is one of friendly courtesy. When anyone walks in the door, the entire team is required to look up from what they are doing to say brightly, “Welcome to Waffle House”. It’s funny to hear some of the regulars chant the greeting along with the staff and that’s the company culture this corporation was built around. A centralized HR team would ensure that all the little things that make a company unique would be a vital part of the onboarding training.
3. Cost Effective
Imagine how much it would cost to have an HR team at every location or within every region. A central HR team would necessarily be bigger than a local team, but they would be able to get the work done with far less HR team members. It’s hard to estimate just how much a company can save, but more than 50% is not out of the realm of possibility. In fact, it may even cost 25% or less to work with one central HR team.
4. Centralized Payroll
Payroll is always a major nightmare for smaller HR teams. This is because each person on the team wears so many hats that it is difficult to become an expert in every task. With a larger, central HR team, each task can be dealt with by an expert in that process. Payroll is especially challenging and once a person with accounting or bookkeeping skills is familiar with the software being used in payroll, the process can almost be automated. It’s much faster and cost-effective.
5. Flexibility in Staffing Budgets
Sometimes it’s difficult to forecast exactly how a business will be doing several months down the road. Not only are HR specialists adept in data analysis, but a central team would be in place to adjust the staffing budget as needed. If one store is overstaffed, some of that payroll budget could be better allocated to a store that is short of staff. Instead of each store going through several channels to make adjustments to their staffing needs, the central HR team would make those adjustments for them. A central HR team would be better able make flexible adjustments to staffing between locations.
6. Core Recruitment
Many companies with multiple locations have their company website set up to take applications or inquiries online. A central HR department would oversee those online applications and also list the various locations in need of staff. They would also detail the requirements of the job in terms of the positions that are open. If each location ran its own recruitment strategies, filling slots in branches that are having difficulty in recruiting staff would be limited. Nevertheless, a centralized recruitment strategy helps to introduce all new recruits to company culture. Each key position, no matter which location is hiring, needs to be filled by individuals who seem well matched to the established culture within an organization.
Your Key Takeaway
Even large corporations may outsource their HR department simply because of the ease at which all those duties can be accomplished almost immediately. There is no need to train an HR team that is already expert in the field and there is much that can be learned from a core, central team. If you are looking to establish an HR team for your company with multiple locations, you might want to consider outsourcing HR or perhaps contracting to work under a PEO. It’s rather like delegating responsibilities but it’s more so a matter of putting processes and tasks in the hands of those who can easily step into the position because that’s what they already do. Once you’ve centralized HR, you might want to look at other functions you can move to a central location. Save time and money while watching your bottom line grow.