Whether you’re a business owner, high-level executive, or investor, you know that every cent counts. As you scale operations, your Human Resources (HR) needs will grow exponentially. Instead of adding new staff or departments to the payroll, what if you could outsource these functions to a specialized expert? Enter the professional employer organization (PEO).
❓What is a PEO?
A professional employer organization – or PEO – allows business owners to outsource key HR duties, ensuring compliance with federal and state employment laws, including:
- ✅ Payroll
- ✅ Benefits
- ✅ Training
- ✅ Compliance
💡Benefits of Using a PEO
When businesses partner with a PEO, they reap various benefits, including time savings, cost savings, a competitive edge, improved tracking and administrative functions, access to strong benefits packages, streamlined employee onboarding, and guidance with government compliance.
💡 Time Savings
Business leaders can focus on daily operations and high-value tasks instead of worrying about HR functions.
💡 Cost Savings
One of the main reasons companies turn to PEOs is the significant cost savings that outsourcing provides. Direct savings come from reducing HR department headcount and software expenditures.
💡 Competitive Edge
It takes a talented team to stay ahead of the competition, but hiring can be costly. PEOs typically employ experienced recruitment experts. PEO clients have an 11%-20% lower turnover rate than their non-PEO counterparts.
💡 Improved Tracking and Administrative Functions
PEOs conduct in-depth HR assessments to minimize risk and maximize growth and development.
💡 Access to Strong Benefits Packages
PEOs help businesses provide employees with competitive benefits like medical, dental, vision, and 401(k) retirement plans, essential for attracting and retaining top talent.
💡 Streamlined Employee Onboarding
PEOs use integrated HR technology to ensure easy access to compliant new-hire paperwork and keep track of employee data.
💡 Guidance with Government Compliance
No business wants fines for non-compliance with employment laws. PEOs offer valuable advice on federal, state, and local regulations, helping companies develop solutions for any issues that arise.
🚩 Common PEO Myths
🚩 Myth #1: Business owners who partner with PEOs lose control over their business.
Truth: Owners and managers gain a strategic partner who takes charge of HR responsibilities to ensure improved efficiency, practices, and strategies.
🚩 Myth #2: A PEO has the authority to hire and fire client employees.
Truth: While PEOs help find job candidates, the decision to hire remains with the owner and the company. Talent management duties stay with the owner, who must notify the PEO of changes for HR documentation updates.
🚩 Myth #3: My business is too small (or too big) for a PEO.
Truth: Companies of all sizes benefit from PEO partnerships. The average PEO client has 22 employees, but PEOs serve a wide range of clients, from start-ups with one employee to larger businesses with over 1,000 workers.
❓Why a PEO Might be a Good Fit for You
If you’re a growing business looking to scale operations while maintaining a realistic budget, a PEO is a perfect fit. Here are some signs it’s time to partner with a PEO:
- 1️⃣ Surprise issues arise from incomplete employee paperwork;
- 2️⃣ Competitors poach your employees with better benefit packages;
- 3️⃣ New employees miss out on benefits enrollment;
- 4️⃣ Your company faces fines for compliance violations;
- 5️⃣ Employees quit on short notice;
- 6️⃣ You’re too swamped with HR duties to focus on your company’s big picture;
- 7️⃣ Payroll duties are overwhelming your staff.
Can My Business Benefit from a PEO Partnership?
Curious if a PEO is the right move for your business? Let’s discuss how Insogna CPA can help you streamline HR tasks and boost your company’s growth. Reach out today, and let’s explore how we can make your life as a business owner a whole lot easier.
Let’s chat about how we can enhance your employee experience and give you more time to focus on what you love about your business!