Taking control of your business’s human resource functions can be hard on a small business. With limited staff and finances, it can be a burden to make sure everything is maintained correctly and in compliance. This is why Professional Employer Organizations, or PEOs for short, are so widely used across the small business market.
Outsourcing to a PEO can be a huge difference in both profitability for a small business and productivity. Quick Sprout tells us that businesses are 68% more likely to succeed when they use a PEO. Let’s take a look at five of the biggest advantages PEOs offer small businesses.
1. Provide Better Insurance Options for Your Employees
It’s no secret it can be hard or impossible to be able to offer great and competitive benefit packages to employees as a small business. Insurance costs are high and most small businesses don’t have the financial ability to contribute large dollar amounts. However, they want to be able to give their employees the benefits they deserve.
With a PEO, they have access to the same benefits that larger companies are able to offer, making your benefit package more attractive and your employees happier about their coverage. This is across the board for health plan, IRA, 401ks and other normal benefits employers offer.
2. Ability to Recruit and Onboard Like Your Larger Competitors
If going through hundreds of unqualified applicants hoping to find a diamond in the rough doesn’t sound like a good use of your time, then you need a PEO that will handle this HR function for you.
PEOs can take control of your entire hiring process. They will recruit candidates, interview (you still have the final say of course,) and onboard the new employee. They also handle all paperwork, such as the application and developing and maintaining the employee handbook.
Without having to lift a finger, these employees show up on their first day onboarded and ready to work, pushing your productivity closer to meeting your goals.
3. Ensure Compliance in Your Industry
With the way laws change, it can be a full-time job making sure you are in compliance with all rules and regulations. Having a team of expert risk managers ready to jump in and help make sure you are compliant is invaluable. A good PEO team can advise you on changes that are being made and changes you need to make to remain in good graces. Failure to comply with laws and regulations in some states can mean hefty fines and ultimately financial ruin for a small business just starting to grow. Additionally, it reflects on your image if you are known as the company who was out of compliance. People will question your reliability depending on the industry you are in.
4. Saving Money on Personnel
Even in the best of times, hiring employees is expensive. An open position means costs related to recruitment and training, let alone salary and benefits. While it can be nice to have someone in-house that you can regularly stop in their office to check in on, it is not cost effective for a small business trying to grow.
Having a PEO managing your HR eliminates the need for administrative services to be hired specifically for your business. This can save you a significant amount of money.
Additionally, you are getting the best in the industry, something a small business is usually not poised to do. These are people with years of experience in the industry that will make your human resources functions run smoothly.
5. Get Answers When You Need Them
One of the biggest benefits to working with a knowledgeable team of professionals is the ability to get answers you need. If someone is out on vacation, you aren’t forced to wait a week until they return. Someone is there to step in and fill that role ensuring you never miss a step in your business.
When employees have questions regarding their payroll and benefits, you no longer have to research the issue and look for a solution. You have a person you can direct them to that can handle any questions the employee may have. Offering a contact to reach out to also gives employees a place to reach out with workplace concerns if they arise without worrying about going straight to the top for something minor. They have a sounding board to tell them how to proceed.
Working with a Professional Employee Organization has many advantages. Depending on the size of your small business, your cash flow, and your budget, working with one is most likely a great business opportunity. Being able to give our employees large-scale benefits with the advantage of working for a small business keeps morale high, which in turn increases productivity.
