Professional employer organizations (PEOs) provide a practical solution for small businesses when it comes to outsourcing the administration of payroll, human resources (HR) and benefits. Many entrepreneurs spend an average of 40 percent of their time handling administrative roles. A large portion of the tasks encompass HR, payroll and employee benefits.
By hiring PEOs, you can focus on other operational tasks that help improve productivity and benefit your entity’s bottom line.
Key benefits of hiring PEOs
Some of the advantages of outsourcing key administrative tasks include:
- Efficiency – redirecting focus on growing your business.
- Avoiding labor-related issues – allowing experienced PEO specialists to handle HR tasks minimizes exposure to the risk of labor issues and violations. Accountability – reputable PEOs ensure that co-employer agreements create accountability.
- Infrastructure – PEOs eliminate the need to invest in IT infrastructure for human resource management
Factors influencing the decision to hire professional employer organizations
The choice to enlist the services is influenced by a number of factors. The size of organization and costs play an integral role in this regard. However, the considerations may vary by industry.
Offering additional benefits to employees
- Professional employer organizations typically offer a broad range of benefits, such as 401k plans, health insurance and more. The service providers administer the benefits, thus reducing the workload on your part.
Number of employees
- Small businesses with 15 or up to 80 employees are generally well suited to enlist the services of a PEO. Technically, any number of workers that make you strain or lose focus on important operational tasks warrants the use of professional employer organizations.
- PEO costs differ depending on a variety of factors, including type of business, company size and range of service.
The specialized experience of PEOs makes it easy for small businesses to remain compliant with state and federal employment laws. The PEO’s decisions are primarily guided by human resources management and employment law compliance. Meanwhile, the firm’s decisions are influenced by productivity considerations.
A PEO Advisor, such as Niroc Consultants, will be an advocate for you in the PEO market while focusing on the best options for your employees so you can focus on your business