Many small businesses need more time and workforce to manage HR tasks. This is why they need a competent partner to ensure compliance, administer benefits, and provide advice. A PEO can handle all of these things for your business hassle-free. They can also reduce your risk with workers’ compensation insurance.
More Time to Focus on Your Business
The intricacies of employment laws can be overwhelming for a business. A PEO’s local experts can guide you to keep your company out of trouble. They know the laws and regulations in each state, city, and county where you operate your business. They also understand how those laws apply to your remote employees. But what does PEO mean in HR? Professional employer groups provide a one-stop shop for HR services. This includes payroll, worker’s comp, compliance, and more. By pooling employees, they can negotiate lower rates for benefits like health insurance. A PEO helps you comply with complex and ever-changing employment laws so you can focus on growing your business.
Having a PEO partner for HR allows you and your leadership team to focus on the aspects of your business that make you unique. It can help retain good employees by offering a better workplace culture and employee benefits package.
PEOs can also save you money on insurance premiums and workers’ compensation costs. They can take care of time-consuming tasks like vetting and purchasing workers’ comp policies and negotiating group rates cheaper than small businesses could get independently. This gives your business a chance to grow more quickly. A PEO can streamline payroll and HR administration, reducing your leadership team’s time. They can free up their energy to be more productive and focus on the areas that make your business successful.
Reduced Risk of Liability
The time savings from an HR outsourcing partner frees up your in-house team to focus on strengthening company culture. They can do this by offering competitive benefits that help you attract and retain top talent in your industry. These include traditional health, dental, and vision insurance offerings, value-added ancillary benefits like ID theft protection, financial counseling, healthy living programs, and more. A PEO can bring the collective bargaining power of all their clients to secure better health, workers’ compensation, and other benefits for employees at a lower cost than your small business could achieve on its own. This allows you to compete more effectively with larger firms for the best talent.
PEOs are constantly up-to-date on employment laws and regulations. This helps reduce your risk of a costly compliance issue that can result in fines or lawsuits. One such example is a failure to comply with Family Medical Leave Act (FMLA) requirements, the average penalty of around $80,000. By working with a PEO, you’ll get expert guidance from seasoned professionals that can keep your business safe from costly mistakes.
More Competitive Recruiting
Recruiting top-tier employees is key to a business’s success. However, finding and keeping them can be an uphill battle. By working with a PEO, you can save time and effort while being more competitive in recruiting. A PEO can help you identify candidates that align with your company’s culture and values. This is done through a strategic approach, which allows the PEO to choose candidates that meet your business’s goals. In addition, a PEO can aid you with the hiring process by managing employee payroll and benefits, including offering your employees health insurance, healthcare flexible spending accounts, and life and disability coverage. Even small businesses can benefit from working with a PEO. These services allow smaller companies to scale while taking the burden of arduous HR tasks off their shoulders. They may even save your business money by freeing up resources to grow it. The PEO’s team of HR professionals works with your existing team rather than replacing them. This way, your business’s specialized knowledge can be leveraged to the fullest extent possible.
Increased Employee Satisfaction
Working with a PEO helps company owners and in-house HR teams focus on employee needs better. This results in a lower turnover rate and more engaged employees. Additionally, PEOs have access to industry expertise that can help protect businesses from hefty fines by keeping them on the right side of employment laws. Many tasks that come with managing a workforce can be complex and time-consuming. This is especially true if the business expands internationally and has different cultural expectations. PEOs can be a valuable resource for helping to address these differences and provide training opportunities that improve employee satisfaction. PEOs also have buying power that can help them offer workers’ compensation and health insurance benefits at more affordable rates than small-business owners could find on their own. This can increase employee satisfaction and attract top talent. Moreover, they can use their experience to help develop effective return-to-work and wellness programs that reduce downtime. This can be particularly beneficial for companies in the manufacturing and service industries where worker safety is paramount.
More Effective Employee Management
Many small business owners need more time and resources to maintain HR duties in-house. By partnering with a PEO, companies get their time back and can focus on building workplace culture and employee morale. In addition, a PEO can help with recruiting and hiring, communicating policies via employee handbooks and more. They also guide through unforeseen situations that arise during an employee’s career. This includes how to manage an employee who experiences a qualifying life event outside of the annual open enrollment period, resolving a conflict between two employees, or what to do if an employee reports that they cannot work due to an illness or injury. Most importantly, a PEO can reduce the risk of compliance mishaps that could cost the company thousands in fines or lawsuits. For example, a PEO stays current on employment laws and will help clients avoid issues such as family medical leave and other state-specific sick leave policies that vary in application.
