Many businesses have questions and concerns about outsourcing their HR functions. The key is to find a PEO that understands your business, goals and management style. Ultimately, you want to be able to trust your co-employer with your company’s legalities. The right PEO will do just that! Here are the top benefits of working with a PEO for HR outsourcing.
You’ll Have More Time to Focus on Your Business
As you know, running a business requires much time and energy. Worrying about HR issues can distract you from the day-to-day tasks and management decisions that lead to company growth. By collaborating with a PEO for HR outsourcing, you may give the PEO part or all of your human resources duties. PEO partners help small firms expand more quickly than those that don’t. That’s because when you focus on your core business, you can make the decisions to help it thrive. Outsourcing some or all of your human resource functions to a PEO frees you up to devote more time to recruiting, training, retaining and advancing your workforce. You also have more time to focus on the company’s bottom line and increase profits by improving productivity, reducing costs and eliminating costly errors.
Managing compliance with employment laws is an ongoing task that changes frequently. Having a PEO that stays on top of the latest changes can save you from incurring fines or other penalties caused by missteps. For example, suppose your company has multiple locations and uses different sick leave policies. In that case, it’s easy to run afoul of local or state employment laws by not keeping up with the regulations in each area. A PEO will keep you informed about current rules and regulations and can make recommendations for changes.
You’ll Have More Money
When you partner with a PEO, you outsource many HR solutions and services. It saves you on staffing costs, payroll taxes and workers’ compensation. It also allows you to reduce inefficiencies and boost productivity. In addition to saving money on staffing, you’ll save on administrative fees and costs associated with compliance issues. Your PEO will inform you about employment regulations so you don’t incur fines or other consequences. It is especially important as federal agencies are constantly updating and changing rules.
A corporation might lose thousands of dollars via missed productivity and training expenses if they hire the incorrect person. A thorough PEO will conduct background checks and interviews with potential candidates to find the best fit for your business. They’ll also assist with negotiating benefits contribution options to find affordable plans for you and your employees. Leading-edge technology is essential for any business, but it can be expensive. A PEO can provide your company with the latest software programs to streamline human resource processes and simplify managing your workforce. It will free up time and resources so you can grow your company faster. It is why many small businesses partner with a PEO for all their HR needs.
You’ll Have More Talent
The HR world is complex and fast-changing, and it’s difficult for most small business owners to keep up. Even a single error in paperwork or oversight in compliance can cost a business thousands of dollars. By outsourcing their HR functions to a PEO, companies can avoid costly mistakes and focus on hiring the best talent. PEO companies can offer the most cutting-edge technology in applicant tracking, new hire onboarding, payroll and time-and-attendance systems and benefits enrollment. Many smaller businesses need help to afford to invest in such technology. By partnering with a PEO, these smaller businesses gain access to the technology they need to run their business and stay competitive.
There are several ways to outsource human resources, each with pros and cons. Some companies may find it more beneficial to work with a PEO, while others may prefer an ASO or HRO. A key difference between a PEO and an ASO is that working with a PEO involves sharing employment liability and making the PEO the employer of record for all legal responsibilities and ramifications.
On the other hand, an ASO allows the company to retain its tax ID number and is not considered the employer of record for any of its employees. Both options are great for any small business looking to free up its own HR team’s time and energy to focus on attracting and retaining talented employees.
You’ll Have More Resources
Many small businesses believe that comprehensive HR solutions and impressive benefits packages are out of their reach. However, by working with a PEO for HR outsourcing, you may benefit from economies of scale that will make your workforce’s employee perks more competitive and alluring. A professional employer can handle almost all aspects of your human resource functions, payroll taxes, workers’ compensation coverage and risk management in a co-employment relationship with your business. You will retain control over day-to-day operations and supervision of your employees. At the same time, the PEO manages the less profit-driven aspects of human resources, such as recruiting, training, managing employee records and designing the overall employee strategy for your company.
PEOs are also experts at handling the ever-changing landscape of employment law, ensuring that your company always complies with current laws and regulations. It alone can save you thousands of dollars in fines and legal fees that may be incurred by even one paperwork error. A PEO also allows you to access lower insurance rates for your company by pooling their clients’ purchasing power in a group setting. It will enable your company to offer employees more competitive health insurance plans, crucial in attracting and retaining talent. As a result, you’ll see a boost in your company’s profitability and productivity.