Why opt for a professional employer organization (PEO) and the HR software it could offer your business?
The answer depends on your company, your employees, and the unique needs that must be met to keep your workforce happy and your business on the right growth track.
Why Work with a PEO
A PEO provides third-party payroll, benefits and other HR support to small to mid-sized companies. These include software platforms for various talent management functions. The right PEO partnership can save you countless hours of precious time on HR tasks, which you can then devote to more strategic and value-added work.
- You enter into a co-employment agreement with a PEO, whereby the PEO becomes the employer of record for your workforce. As such, the PEO takes cumbersome and potentially stressful talent management responsibilities off your plate. You retain overall management control, but your PEO pays your employees under its own Federal Employer Identification Number (FEIN).
- Software options offered by PEOs can assist you with recruiting, employee onboarding and offboarding, payroll processing, benefits offerings and administration, compliance and risk management, safety, training and development, and more. This can be an excellent, low-cost alternative to hiring additional HR staff.
- A PEO can also save you money on employee benefits, while at the same time enabling you to offer more competitive packages. Because it represents many companies, a PEO can negotiate better options and rates for health insurance, retirement plans, wellness programs, voluntary benefits and more.
As reported by the National Association of Professional Employer Organizations (NAPEO), businesses that work with PEOs grow 7 percent to 9 percent faster, have more than 10 percent less employee turnover, and are 50 percent less likely to go out of business than their non-PEO counterparts.
The advantages of PEO software include not only cost effectiveness, but also the fact that your PEO assumes liability for any HR complications or issues that may arise.
How to Make the Right Choice
DIfferent PEOs cater to different business needs. There’s no one-size-fits-all solution when it comes to which one to work with. You need to consider:
- The technology: Which online services does a PEO offer, and will its software package integrate with your existing systems?
- Employee benefit offerings: Will they enhance your employer brand to ensure that you can attract and retain top talent?
- The cost: Will your outsource agreement maximize your ROI while providing the services most important to you?
Key HR can help you make the right choice when it comes to working with a PEO. Should you do it at all? Or would another HR outsource partner be more optimal for your company? For instance, for very small companies or those just starting out, outsourcing only HR software may be the best approach. Whatever your needs are as your business evolves, we can assist – and connect you with the preferred provider company that will best meet your needs. Contact us today to learn more.
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- On October 11, 2022
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