“Day-to-day HR priorities aren’t being handled properly. Our staff is missing deadlines and mistakes are being made. The team is being pulled in so many other directions that it’s nearly impossible for them to keep up with the latest legislation. We need to hire another person, but it’s not financially feasible.”
It’s a scenario we’ve heard so many times.
These aren’t just inconveniences for your company, they could trigger costly penalties. You’re trying to grow the business, but what’s growing is the amount of time spent managing HR. Here are the top 6 reasons why you should consider partnering with a professional employer organization (PEO) and get back on track.
Whether you have someone dedicated to HR or not, one person cannot stay current with everything. They might spend countless hours researching the right resolution to a specific issue. What about the question they don’t even know to ask? For instance, do they know that losing an unemployment claim negatively impacts your SUTA tax rate for three years? That’s when partnering with a PEO can help.
Many companies don’t realize how affordable it is to outsource HR to a PEO. Since PEOs have many clients, the cost per client is a fraction of what it would cost to hire each individual expert. On average, it costs between 2 – 4% of payroll for companies to access an entire team of HR experts.
As many smaller companies can attest, it’s hard to secure benefits when purchasing at a smaller scale. Since your benefits package directly impacts your ability to attract and retain talent, this is where a PEO’s buying power comes into play. You’ll have access to big-business employee benefits such as: 401(k) plans, health insurance, dental, life, and others not typically available at smaller companies. Usually voluntary benefit carriers charge small groups exorbitant rates to offset the risk. Working with a PEO, those limitations are waived, and you level the playing field. You’ll also save time because any benefit change or claim issue from employees can be directed to your PEO.
BONUS: Companies using a PEO have 10 to 14% lower employee turnover.1 Better benefits make a big impact!
You never get a second chance to make a first impression. This especially holds true when you’re onboarding a new hire. You want a process that represents your forward-thinking values. With countless HR software platforms, it is too time consuming and cost prohibitive for smaller companies to figure it all out. This is another advantage of working with a PEO. They have analyzed all the options and made the capital investment on the best software solution. Depending on the PEO, they will handle integrating with your legacy system and making any updates or minor patches (be sure to ask about this).
Liability is a big concern. Interpreting every new or revised legislative change that affects your business is nearly impossible. A PEO has staff members whose sole focus is to keep track of new laws, understand their impact, and provide guidance. This could include updating your employee handbook or formalizing policies and procedures to protect your business. What a relief knowing an expert is proactively protecting your company.
Scrambling every month to make sure payroll reflects any changes from employees or new legislation can be nerve wrecking. That’s another stress eliminated when a PEO files all payroll taxes, provides employees with W-2s and handles child support garnishments.
Being able to accurately forecast your costs is a huge benefit. Your PEO works tirelessly to manage costs so they can keep your business. Their team has long-term relationships with many insurance carriers and negotiates to keep renewals low, exploring new plans that avoid increases.
Would this kind of help benefit your company? How do you understand what is a PEO and how to choose the right one? Be sure to check out these tips. As one of the first PEOs in the country to be certified by the IRS,* MidwestHR, a Chicago PEO, knows HR. We’ve got tenured experts who will feel like an extension of your team without the management woes. Quite simply, our job is to take HR off your plate so you can focus on growing your company. Give us a call at 630-836-3000 to learn more.
We’re always happy to answer any questions.
1Professional Employer Organizations: Keeping Turnover Low and Survival High, McBassi & Company, 2014.
*The IRS does not endorse specific Certified Professional Employer Organizations. For more information, please visit www.irs.gov or our website at midwesthr.com.