Simplicity by Outsourcing
January 31, 2011
By Sarah Dobson
Ontario Retailer Successfully Outsources their HR and Payroll to Bridgepoint Inc.
Mister Safety Shoes steps into savings, simplicity by outsourcing
Ontario retailer outsources HR and payroll
Forty years ago, Frank and Nella Colantonio started Mister Safety Shoes in Ontario, focusing on selling safety footwear. Now the company has eight retail outlets along with 15 mobile stores that travel throughout the province.
But where once there were six employees, there are now 70 full-time workers. And HR responsibilities have grown accordingly. As a result, Mister Safety Shoes now outsources all of its HR functions.
“We’re looking to sell shoes — that’s our main focus — and there’s so many things to keep track of that there’s no way we could keep track of all that stuff on our own,” says John Colantonio, Managing Director at Mister Safety Shoes in Toronto. “(HR) is certainly more complex than it was 25 years ago as far as what the rules are and what you need to do as an employer.”
In the past, some rules didn’t apply for employers with fewer than 10 workers, so smaller companies could float under the radar, he says. But as the firm grows, it’s hard to know when to be compliant.
“It’s only going to cause you problems in the future if you don’t look after things in the present.”
The company’s move to have an outsource provider take on recruitment, training, benefits administration, human capital and compliance actually came about after a trial run with an in-house person. Mister Safety Shoes was keen to hire a senior HR person but could only afford a more junior person, who lasted one year.
“What we found is that they were short on some of the resources that someone more senior could give us,” says Colantonio. As a result, in 2005, the company looked at a few HR vendors and settled on Bridgepoint in Toronto to take on an HR role. The transition was not difficult, he says, as the full-time HR person was able to exchange information and bring the consulting firm up to speed.
And since the switch, “it’s gone really well,” he says. Bridgepoint is on site at Mister Safety Shoes every other week and has two people dedicated to the company for the rest of the time.
While some employees had reservations about the switch — as they appreciated being able to see an HR person anytime —they have come to realize it’s a better fit, says Colantonio. And, after five years, the Bridgepoint people are familiar to many of the new hires.
“We don’t have HR issues every day and it’s not a big deal to wait a few days. Of course, if it’s serious, (Bridgepoint is) a phone call away and we’ve had instances where we need them now and they’re always available.”
There are no real challenges to mention, says Colatino. The outsource provider has the resources to deal with issues and is proactive in staying up to date with legislation, setting targets and organizing the group to make sure things are signed off.
But two years ago, payroll at Mister Safety Shoes was still being handled in-house, by Colantonio himself.
“I’m not a payroll guy,” he says, so he sometimes relied on outside accountants when it came to reconciliations, workers’ compensation or the province’s health tax.
Once a newer payroll system was introduced, which was more online-based, payroll could be done from anywhere so it made sense to have Bridgepoint take on the task.
“The combination of technology and me not wanting to do it ever again and them doing a way better job than I was doing has worked out,” says Colantonio.
And in outsourcing payroll, procedures were also improved and corrected.
“(Bridgepoint) brought so much more knowledge to that side of things — there were some things we had to fix in the way we were doing payroll procedures so, after we got that cleaned up, it’s been smooth sailing,” he says.
Mister Safety Shoes has also been able to do more benchmarking around salaries to gain a better sense of compensation levels, says Colantonio.
“That’s been really helpful. A few years ago, we had some issues with retention and our retail side of things and that seemed to fix itself over time,” he says. “(By) looking at compensation and the way we compensate people, we seem to have longer-tenured people now in that area.”
As to any plans to move elements of HR or payroll back in-house, it just doesn’t make sense, says Colantonio. The company would not be able to hire somebody with all the capabilities needed at the same budget.
“I found it’s cheaper than having a full-time person — we were paying the full-time person more than our outsourcing, even with them doing the payroll, and our internal HR person didn’t even do the payroll,” he says.
“We’re certainly getting more value for what we’re paying today than what we had when we did it internally. I don’t think anybody here would think about going the other way right now.”
But if an employer is considering an outsource provider, it’s really important to have the right relationship, says Colatino. Having tried outsourcing for areas such as marketing or advertising at Mister Safety Shoes, he knows every provider is different and finding the right fit is key.
“You shouldn’t take it for granted they’re all the same,” he says. “If it doesn’t feel like the right fit, move on — there is probably somebody out there that speaks the same language as you.”
At this point, Bridgepoint feels like part of the company, says Colantonio, because it understands what Mister Safety Shoes is all about, what it’s trying to do and how it works.
“You have to find somebody that takes an interest in your business, they want to know what’s going on and have a good understanding, because it’s really frustrating when you’re paying somebody and they don’t really know what’s going on.”