Many businesses may need clarification on the vast array of options for help with human resources. In short, PEOs mitigate risk and provide comprehensive HR solutions through a co-employment partnership.
A PEO can assist with various tasks, including payroll processing, workers’ compensation insurance, and an employee benefits package design. It’s ideal for small and mid-sized businesses not positioned to support an HR department independently.
For smaller businesses, HR is an expensive function. In addition to payroll, taxes, compliance, and other expenses, there is also the cost of hiring the right talent for your organization. This requires investing in the latest technology tools to ensure you can automate as much of the task as possible. With a professional tool, you can simplify your reporting and streamline the process so that you can focus on other areas of your business.
What does PEO mean in HR? It allows small and midsized businesses to partner with them for co-employment, where the PEO assumes certain employer rights, responsibilities, and risks. Still, the client company controls employee recruitment, performance management, and overall workplace culture. Additionally, a PEO can help your company save money on payroll costs by using economies of scale and offering competitive benefits that would be difficult to afford for a smaller business alone.
Another benefit of working with a PEO is their ability to help your business comply with employment laws and regulations. They are experts at classifying employees, preparing tax forms, and ensuring your company follows equal employment opportunity (EEO) laws. In addition, they can also reduce your risk of legal action from employees by providing a legal defense benefit. This can be a huge benefit for many small and midsized businesses.
When it comes to HR, there are many complex laws governing the employer-employee relationship. PEOs have the expertise to stay up-to-date on these laws and ensure that your business is always compliant. This frees up time for your internal team to focus on tasks that move your company forward.
PEOs can also provide a more streamlined way for businesses to manage their human resources systems. This is especially useful for small businesses using multiple vendors for various human resources functions. Streamlining processes makes communication easier for both HR teams and employees.
Using a PEO can also help your business save money on employee-related expenses such as recruitment fees and training costs. Additionally, a PEO can offer lower workers’ compensation and health insurance rates and reduced administrative fees. These cost savings make PEOs an excellent option for growing companies seeking to reduce liabilities and improve profitability.
As you consider working with a PEO, finding one compatible with your business needs is essential. Look for a reputable provider with extensive experience and a track record of success. Moreover, you’ll want to discuss an appropriate service level agreement (SLA) and governance strategy with the PEO to determine how your business will work together moving forward. The key to success is that your business and the PEO are on the same page concerning policies, procedures, and practices.
Recruiting and Retaining Top Talent
HR departments must build workplace cultures that keep the best employees engaged. This involves finding ways to provide opportunities for career development and recognition. This is only sometimes possible with management buy-in, but the best HR teams have various tools to motivate employees and reward high performers.
As the unemployment rate continues to linger near multi-decade lows, businesses must ensure they can fill open positions quickly and effectively. Hiring managers have become more discerning regarding job candidates, but several tactics can still be used to attract top talent.
PEOs can also help recruitment by hiring outside experts to review resumes and conduct interviews. They can also connect employers to qualified workers through their networks of benefit carriers and other service providers.
Ultimately, the role of PEOs is to free up time for business owners and HR professionals to focus on operational decisions that steer the company toward growth. Streamlined payroll, compliance, and benefits processes can add to a more efficient and productive company. By choosing a reputable and experienced PEO provider, companies can get the help they need to manage employee-related responsibilities more efficiently. This will free up time for strategic decision-making and allow HR to remain a vital and trusted partner for the business.
Focus on Growth
Many small business owners think HR management is reserved for large corporate environments. But when companies partner with a PEO, they can focus on the strategic aspects of HR that support long-term business goals.
Many PEOs also help companies stay up-to-date on the latest employment laws and regulations changes. This helps businesses avoid costly mistakes or fines, and it also allows them to provide their employees with more accurate information regarding their job benefits.
In addition, a PEO can offer workers’ compensation insurance coverage to protect businesses from expensive lawsuits and other costs associated with workplace accidents. This is
particularly important for smaller businesses that cannot hire in-house dedicated risk managers or other staff.
Lastly, PEOs can help companies improve their employee benefits packages to attract and retain top talent. This will help companies grow, increase productivity, and boost profitability.
As a result of the work that PEOs do, companies have more time to devote to tasks that drive revenue. They can handle payroll, human resources compliance, and other tasks that often hinder a company’s growth and success. In a time when it’s more complicated than ever to find quality employees, partnering with a PEO can be a smart move for many companies.