Highlights
- Businesses in the cannabis industry deal with ever-changing regulations, complex reporting requirements, and payroll challenges.
- Outsourcing HR functions like payroll and compliance can be a smart way to save costs and get access to specialized professionals, while reducing your team’s admin workload.
- At Greenleaf HR we provide comprehensive HR solutions to make your cannabis business more efficient. Learn how we can help!
Running a business involves an array of HR tasks. And that’s even more true in the fast-growing cannabis industry. HR outsourcing is a savvy alternative for businesses that want to focus on scaling up while reducing admin workload.
By taking over critical functions like payroll, benefits administration, and compliance, external HR providers can boost your business’s efficiency and help you navigate this sector’s complex regulations.
This article walks you through the basics of HR outsourcing and how your cannabis company can benefit from choosing a strategic partner.
Let’s jump right in!
What Is HR Outsourcing?
Human Resources Outsourcing (HRO) refers to the practice of delegating certain HR functions and responsibilities to external service providers.
In most cases, companies choose to outsource HR tasks to specialized partners to save costs, increase efficiency, and reduce the time spent on burdensome administrative tasks, so their internal resources can focus on more strategic parts of the business.
Difference Between PEO and HRO
There are different approaches to HR outsourcing. Professional Employer Organizations (PEOs) and HRO are the most common alternatives, though they differ in their scope and the type of services they provide.
Let’s explore the key differences between PEO and HRO:
Co-Employment vs Service Provider
When you partner with a PEO, they become a co-employer for your company. This means the PEO assumes specific employment responsibilities and risks, while you stay in control of your business’s core areas.
According to NAPEO, businesses that work with a PEO grow 7 to 9% faster than similar-sized businesses that don’t.
In the case of HRO, on the other hand, your business remains the sole employer of your workforce.
HR Services
PEOs offer a comprehensive suite of HR services, which often includes:
- Payroll processing
- Benefits administration
- Compliance management
Sometimes, a PEO’s packages may include additional HR services like employee training and development.
On the contrary, HRO arrangements allow for more flexibility. Instead of hiring a fixed package of services, you can choose the specific HR functions you want to outsource. In this case, you might find other HR services available, such as performance management, applicant tracking, or employee onboarding services.
Choosing between PEO and HRO will depend largely on your business’s needs, goals, and preferences.
HR Outsourcing Services for Cannabis Companies
Cannabis companies come with a unique set of challenges, from complex regulations to specific reporting requirements that vary from state to state.
On top of this, the fact that marijuana is still considered illegal at the federal level in certain states across the U.S. adds complexity to the payroll process, as many national banks can’t support companies within the sector.
When it comes to outsourcing HR services, it’s key to find an external provider that specializes in the cannabis industry and its ever-changing laws and regulations.
That way, you can minimize the risks of non-compliance, which can lead to severe penalties and costly fines.
HR Outsourcing Benefits
Outsourcing HR offers many benefits for companies, from increasing efficiency to saving valuable time. Wondering how it could help your cannabis business? Let’s take a closer look!
1- Cost Savings
Outsourcing can save your company money that you would otherwise need to invest in hiring specialized HR professionals, with the associated costs of equipment, workspace, and training.
2- Reduce Risks
With ever-changing regulations and legal requirements, having a team of experts working by your side can minimize the risk of non-compliance for your cannabis business, which can lead to costly fines, penalties, and even the loss of your business license.
However, it’s crucial to choose a partner that specializes in HR for the cannabis sector and is knowledgeable about local, state, and federal laws.
3- Focus on Impactful Activities
Administrative tasks are time consuming and can take precious time from your internal HR team. By outsourcing non-core HR functions, they can have more time to focus on strategic, growth-driving activities.
4- Access to Advanced HR Technology
Another advantage of outsourcing HR is getting access to cutting-edge HR systems. Your business can benefit from advanced software to increase efficiency when processing payroll, tracking time and attendance, and managing benefits.
How to Choose an HR Outsourcing Provider
Finding the right HR outsourcing provider for your cannabis company can be quite a challenge. Here are a few things to keep in mind when evaluating different options:
Clearly Define your Objectives and Needs
Make a list of your business’s HR tasks and identify which are the specific areas that you’d like to outsource. Consider your company’s goals and the specific challenges of the cannabis sector.
Evaluate your Provider’s Expertise in the Cannabis Industry
The cannabis industry is dynamic and subject to frequent legal shifts. Partnering with a provider that’s familiar with regulatory aspects — including licensing, record-keeping, and reporting requirements — is a must.
Make sure that their compliance management system addresses the specific requirements of the sector and it’s being constantly updated.
Look for Customizable HR Solutions
Choose an HR outsourcing provider that allows you to customize their solutions to meet the specific needs of your cannabis business. This may involve tailoring your payroll administration process, workplace safety requirements, or employee training programs.
Meet Greenleaf HR: HR Solutions for Every Business Size
Cannabis businesses face complex challenges and barriers that can be quite tricky to navigate for a small HR team.
By delegating some of your HR functions to specialized partners, you can protect your business from non-compliance risks and save valuable time to spend on more strategic aspects of your business.
At Greenleaf HR, we provide payroll and HR solutions for cannabis companies of all sizes, across the U.S. for the past two decades, we’ve been helping businesses grow while keeping them safe and fully compliant.
Contact us to learn how we can make your cannabis business more efficient!
