Every small business owner knows that every dollar counts when it comes to running a business. As a business grows, HR demands also increase significantly, and this is where they can benefit from a Professional Employer Organization (PEO).
In this article, we will explore how small businesses can benefit from PEOs, whether they are looking into partially or completely outsourcing third-party organization help in HR functions via a Professional Employer Organization.
What is a Professional Employer Organization (PEO)?
A Professional Employer Organization (PEO) is a co-employment alternative that small businesses can benefit from their HR functions. Besides, there are many benefits of partnering with PEO like low-cost health insurance, frees up resources of employing a full-time human resource department and allows you to devote your time in the business among other benefits.
When you factor in all the benefits that a professional employer organization can offer your small business, then you can be assured that you’ll meet your goals in no time.
Here are six key areas where entering into a co-employment with a PEO can help you save money and assume many employer-related responsibilities.
5 Top benefits of outsourcing HR functions to a PEO
PEO’s will save you money, and the headaches that come when running a human resource department and dealing with employees. Let’s dive in and see how you would benefit from PEO services.
A professional employer organization is a specialized and full-service human resources firm. In various business sectors, PEOs are known for handling back office operations for a variety of divisions.
If you want your business’ back office operations to be handled by an efficient team with significant resources, looking into a PEO would not disappoint. But before you go ahead with that action, you might be curious to learn more about PEOs, their benefits, and their overall functionality for a business.
To help you through that learning curve, here are 5 ways a PEO can help your business with its day to day activities.
1. They Can Process Payroll in an Efficient Manner
While PEOs offer a variety of back office solutions, they are most popular for their payroll software services. It’s because a PEO payroll solution not only brings efficient processes to the table, but also carries the benefit of lower costs.
Instead of spending a small fortune on in-house payroll specialists and software, you can typically pay a small percentage of your payroll to access these services through your selected PEO. This allows you to ensure accuracy and swiftness in your employee payroll without breaking the bank.
If you are starting your business from the ground up, this could help you steer clear of startup struggles. As a result, you can stop fretting about your payroll and focus on setting up your office wall decor instead.
2. They Can Take Care of Your Tax Requirements
When you enter into a PEO partnership, it takes the form of a co-employment arrangement. This means that your employees are registered under the tax details of the PEO instead of your company.
Apart from opening doors to a variety of benefits for the employees, this also saves you from the hassle of filing taxes all on your own. In addition to cutting back on accounting costs, it also brings significant ease to your business process.
In turn, you can save time on lengthy tax filings and instead invest it in your employee training and mentorship. You can also use the time and money you save to set up your office furniture in order tosuit a professional aesthetic.
3. They Can Handle Your Employee Insurance
As mentioned above, PEOs file your employees as their staff under the co-employment agreement. Besides helping you with tax filings, this also allows them to offer insurance benefits to your employees.
Apart from taking care of your employees, this also incentivizes their association with your company. This can help you reduce employee turnover while improving your ability to hire top talent for your business.
Due to this reason, this particular advantageshines through as one of the most beneficial aspects of partnering with a PEO. No matter the type of industry you operate in, it allows you to make the most out of your PEO partnership from a financial and functional perspective.
4. They Can Assist You With Compliance
PEOs are exceptional in adhering to compliance measures for a variety of industries. From financial institutions to retail entities, these firms and their professionals can help several businesses steer clear of violating any respective industries’ regulations.
To take this benefit to the next level, PEOs can also assist you with performing regular audits. This makes sure that your business is operating in line with your industry’s specific rules on a consistent basis.
Apart from steering clear of possible violations, this feature also gives you the peace of mind that you have reliable experts advising you at every step along the way. By noting consultation points in a business journal, you can continue practicing this adherence to respective laws and regulations.
In addition to all of these benefits, many PEOs can also help with regular human resources and recruitment processes. If you’re a business owner who wants to reap all of the benefits that PEOs have to offer, you should make a list of your business needs and prioritize the most important needs. Then, through a little research, you can easily join hands with a PEO that would make a perfect fit for your business. This way, you can ensure that your business keeps thriving with professional support across several divisions.
5. They can Help Prevent Lawsuits
A lawsuit from an employee can hurt and devastate your small business bringing it to its knees. A PEO will help you keep employer liabilities in-check like wrongful termination and other employment-related claims.
In the case you have an in-house HR department, outsourcing human resource professionals will give your business a significant advantage.
