Hot Stuff

Hot Business: Virtual Human Resources

Virtual human resources continues to experience explosive growth, securing its spot once again as one of the hottest businesses for the year ahead. According to a study released by the Society for Human Resource Management in July, one-third of polled employers outsource employee assistance, 17 percent hire others do their outplacement services, and another 17 percent farm out employee training.

"Human resources is becoming increasingly complex and technical, which makes it very hard for small and midsized companies to maintain a level of expertise or breadth," says Judy Clark, owner of two Tualatin, Oregon, HR consulting companies. And that means opportunities for HR outsourcing firms.

Not sure exactly what HR outsourcing encompasses? HR Today notes several areas commonly outsourced: strategic people planning, benefits administration, compensation, recruiting, policy and procedure management, compliance with government employment laws and workplace regulations, and general HR administrative functions.

Clark offers several tips for HR outsourcing companies. It's best to start with credible references as a consultant, she says. Obtaining various certifications available for HR professionals will also boost credibility. Once you start recruiting clients, get to know their businesses inside and out, and help them feel comfortable revealing employee information to you. Trust is crucial in this business.

Many companies are now providing human resources functions online. For example, KnowledgePoint in Petaluma, California, has created a Web-based service, HR Tools, that enables users to handle functions such as writing performance reviews or job descriptions, or determining whether an employee is eligible for overtime pay.

Whatever part of the industry you decide to pursue, the key to success is credibility, credibility and more credibility.

Find out more about virtual HR by logging on to the Society for Human Resource Management's site at or by checking out HR Today at

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This article was originally published in the December 1999 print edition of Entrepreneur with the headline: Hot Stuff.

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