When you have a small team, and your business is at a standstill from growing, there’s not enough time in the day to get all the work done. As the owner of a business, you are probably spending the majority of your time managing invoicing, payroll, and HR administration.
However, HR-related tasks do not generate revenue. A professional employer organization (PEO) is an outsourced HR service that can help your business with all the HR-related duties and more. Many companies outsource parts of their HR to PEO services because they provide comprehensive HR and administrative services. A PEO service provides expertise and technology to help businesses grow and manage their day to day administration efficiently.
How Does a PEO Work?
A PEO company works through a practice called co-employment. Through co-employment, you and the PEO company share the responsibilities of the employees. With a co-employment agreement, your business can leverage the resources of a PEO company, such as handling payroll administration, tax filings, and HR support.
Through the co-employment agreement, you know that HR specialists are handling the HR-related tasks of your business, so you can focus on generating revenue and growing your business. How to outsource HR for many companies comes down to these main reasons: minimizing costs, reducing risks, and increasing productivity for many small businesses.
Here are some ways using a PEO company helps you with outsourcing HR.
All businesses want to cut costs, and one of the most substantial expenses for a business is its workforce. There are many hidden costs that employers incur besides an employee salary, like unemployment and payroll taxes, workers’ compensation, and health insurance. However, businesses need employees to run. So, companies need to find the most cost-effective solutions to help with the challenges they face as employers.
Using a PEO company to outsource human resources is a cost-effective solution. PEOs pool their clients’ employees, which gives them considerable buying power to acquire health insurance, workers’ compensation, and other employee benefits plans at discounted rates.
Keeping up to date with hundreds of state, local, and regional regulations and laws is nearly impossible for a single employer who does not have the resources. A PEO company has many HR specialists in its employ that understand and can help your business comply with labor and employment laws that could affect their company and implement administrative and procedural tasks that follow government compliance.
The HR specialists in a PEO company can help your business with transaction HR, such as processing payroll, managing employee benefits plans, processing workers’ compensation claims. They can help with strategic HR, such as designing succession plans, recruiting top talent, and creating performance management processes.
A PEO company will take on the burden of tedious and time-consuming administration tasks, which frees up business employers’ time to work on productivity and generating revenue for the business.
Outsourcing HR from a PEO company helps improve your workplace productivity because your business has the resources of trained professionals available to them. These experts can provide high-quality service and results, where you can rest easy that administration is being done correctly and in compliance with the laws and regulations. Productivity in the workplace grows because employees know that their paychecks and benefits are accurate and on time, so they can focus on their job duties, instead of having their pay fixed.