Professional employer organizations (PEOs) can be a tremendous asset to your business. These innovative businesses help small and midsize businesses tackle their most time-consuming and tedious problems. By doing so, PEOs free up frontline HR staff to focus on the kinds of value-added activities that can help spur business growth.
Does the following scenario sound familiar? You’ve asked your HR department to help train your sales staff in a new selling technique. However, your HR director is overwhelmed with the minutiae of timesheets and payroll and hasn’t had the time to help your sales director develop a training curriculum or locate an experienced training vendor. This is the experience that many companies are all too familiar with.
Another scenario that a business might run into is if the one or two HR generalist staff you have are then overwhelmed by a new (potentially costly) regulatory requirement they have no experience in and already have trouble keeping up with just vacation requests, let alone payroll and benefits administration. If your business is struggling with these or similar challenges, a PEO can help you solve them quickly and cost-effectively.
How Can a PEO Help My Business?
When you collaborate with a PEO, you let them handle your HR tasks that are some or all of the following:
- Time-consuming
- Routine (not requiring specialized knowledge of your business or culture)
- Operationally essential (but generally not revenue-driving)
- Compliance-related
When you do so, your HR staff is freed up with the time and space they need to handle more complex challenges. Those tasks include nurturing productivity, fostering diversity, and developing professional development opportunities.
HR staff who are no longer swamped with tedious tasks can help ensure your employees have the necessary resources to be more productive and stay longer, leading to higher revenue and lower labor costs. Here are just a few ways PEOs can help you tackle your most time-consuming challenges:
Recruitment and Onboarding
Finding the right people is critical, but it can be incredibly time-consuming and challenging to do so. And if you bring the wrong person on board, they may leave quickly, resulting in wasted time and money. Or they may stay and bring down morale, lower productivity, and raise turnover rates.
An experienced PEO can help your business identify, attract, and recruit the right talent for your business. Not only do they maintain extensive networks of job seekers, but they also have the personnel resources themselves to devote to your search fully. You don’t have to worry about taking precious time from your limited HR staff to complete a rushed search or falling victim to internal hiring biases that may result in the wrong pick.
Onboarding is another area where many small and midsize businesses struggle. Onboarding is not only about making a good first impression but also about setting a new employee up for a successful tenure in their new position. PEOs use robust and customizable onboarding applications and other tools that can help ensure your new hires have what they need to succeed.
Payroll and Benefits
Payroll is another fundamental yet administratively burdensome operational area many businesses struggle with. When you use a PEO, you enter into a co-employment arrangement – a partnership in which the PEO assumes certain administrative functions on behalf of the business. In other words, the PEO will handle your payroll for you.
Moreover, they’ll also handle your benefits administration. And because a PEO has multiple business clients, they have substantial negotiating power. With that negotiating power, they can get rates you cannot get from benefits providers alone.
PEOs can offer you and your employees better coverage at lower costs. They can save your HR staff from countless hours helping your employees deal with basic inquiries. And they can save you a lot of money on the benefits you offer your staff.
Professional Development
PEOs can also help your HR departments offer and deliver training opportunities to your staff. PEOs typically offer businesses access to online portals that support e-learning content. Many also provide a slate of basic office skills training offered by third-party providers.
Using a PEO’s platform and training resources can help you cover the basics while your HR staff focuses on more specialized training and related professional development work. Your HR personnel doesn’t have to worry about ensuring your staff knows fundamental Excel functions. Instead, they can work on initiatives such as specialized training, professional advancement paths, mentorship and internship programs, and other work that truly advances your business.
Separation and Offboarding
In your co-employment arrangement, you maintain control of hiring and firing decisions. And there will come a time when you need to let one or more employees go. PEOs can take the administrative burden out of terminations and out of voluntary quits and retirements as well.
When your employees decide to leave on their own, you need to get feedback on their experience working there. It’s also important to preserve as much institutional knowledge as possible. If you don’t have the resources to handle employee transitions effectively, you could soon face serious morale and productivity problems.
PEOs can help you handle employee exit interviews and other processes that help ensure an employee’s transition is as painless for them and your business as possible. No longer will your overwhelmed HR staff miss the opportunity to get critical feedback from departing staff because they’re overwhelmed with trying to find the employee’s replacement. A PEO can handle both without missing a beat.
Regulatory Compliance
HR laws frequently change, whether due to a new law being enacted, a new regulation being implemented, or a court decision resulting in a new mandate. It’s hard even for lawyers to keep up with these changes. However, PEOs have the resources to keep pace with labor law and regulatory changes so your staff doesn’t have to worry about it.
Given that they also usually represent multiple clients in your region, they understand the practical implications of legal and regulatory changes on businesses like yours. You’ll have the ongoing expert advice you need to ensure you comply with new laws without the need for expensive legal consultations.
Further, many small businesses may already be out of compliance with existing laws and not even know it. PEOs can help you audit your business to ensure you aren’t inadvertently violating any laws and regulations and putting yourself at risk for hefty fines or legal action.
Getting Started with a PEO
Now that you understand some of the many benefits a PEO provides, you may wonder how you can hire one for your business. NetPEO helps businesses find the right PEO for their business. We work with you to assess your needs and then help you identify the best options for you.
So if you’re looking to streamline your HR’s administrative work and free them up to help you grow your business, give us a call. We’re looking forward to helping you identify and select the PEO that can help you build the kind of business you envision. Contact us today, and let’s schedule a time to discuss your needs.
