Grow Your Small Business with a PEO

As a small business owner, you juggle many responsibilities that require complete focus and dedication "on the business"—yet owners and operators find themselves trapped working "in the business" and dealing with the complexities of employment.

What if there was a simpler way to run your business and manage HR? Professional Employer Organizations are the solution.

Think of a PEO as your outsourced human resources department, taking the weight of HR off your shoulders. PEOs handle the complexities of employment, including payroll, payroll taxes, employee benefits, compliance, and risk mitigation.

When you partner with a PEO, the PEO joins your company as a co-employer. This allows the PEO to manage administration HR tasks, negotiate insurance rates on your behalf, and share employment risks. While a PEO handles HR on your behalf, you remain in control of day-to-day operations as a business owner. 

There's no loss of power when you partner with a PEO—just more time back in your day to run your business. 

Small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business. The annual return on investment in cost savings alone from using a PEO is 27.2%!

In this blog, we'll explore how a PEO can grow your business:

• Reduce costs and improve efficiency.
• Enhance employee productivity.
• Increase core business activities.
• Drive growth and expansion.
• Mitigate risk and ensure compliance.

Reduce Costs and Improve Efficiency 

Economies of Scale 

Compete with big-company employee benefits without sacrificing the quality your employees receive. PEOs leverage economies of scale to negotiate better insurance rates with carriers on your behalf. PEOs group employees together, forming one large group to gain massive negotiating power.

Small business owners and their employees benefit from this negotiating power with access to affordable and competitive employee benefits, health insurance, workers' compensation, and retirement plans traditionally reserved for large corporations.

Reduce Operational Costs

PEOs are massive time-savers for business owners and entrepreneurs. Employers can eliminate redundant and tedious tasks like payroll processing, benefits administration, and manual paperwork. In 2022, a Deloitte survey reported that 57% of executives outsource HR, with cost reduction being the primary driver of outsourcing.

By spending less time on administrative tasks, business leaders can spend more time directly contributing to bottom-line growth. You will receive all the benefits of an in-house HR team without the costly overhead of salaries, benefits, and office space. Moreover, you will not have to spend the time to find, train, manage, and figure out how to retain those positions.

Increase Core Business Activities 

Boost Productivity

PEO clients experience higher rates of both employee growth and business revenue growth. Reducing the administrative burden on business owners gives them time to work "on the business"—rather than "in the business." With HR tasks handled by the PEO provider, executives can allocate their resources toward revenue-generating activities. It also alleviates time and frustration for employees by reducing or eliminating manual tasks related to employment.

Streamline Processes

PEOs offer end-to-end HR solutions for all stages of the employee lifecycle, from onboarding and drug testing to health insurance and performance reviews. By teaming up with a PEO, you receive access to a team of HR professionals who can answer your questions, provide guidance, and address complicated issues on your behalf. This avoids the headache of researching and trying to solve problems yourself.

PEOs also provide self-service technology for managing various HR processes like automated payroll, time tracking, and benefits administration, eliminating the need for multiple systems, saving time, and reducing errors.

Drive Growth and Expansion

Scalability 

As your company grows and changes, so do your HR demands. A PEO scales its services and fee structures to meet your needs without delay or service interruptions. This allows companies to expand without administrative constraints and burdensome overhead costs.

80% of PEO clients report moderate to significant growth in the past three years, compared to 50% of non-PEO users. Whether your organization is growing or contracting, acquiring or divesting, or hiring team members across multiple states, PEO infrastructure can quickly adapt and overcome challenges without the growing pains typically associated with scaling operations.

Risk Mitigation and Compliance

Reduced Risks

As the complexity of policies, procedures, and regulations has increased in the business landscape, so have the responsibilities of business owners. From workers' compensation and claims management to loss control and safety training, PEOs identify potential risks and liabilities you may experience as a company, provide customized recommendations for your business, and handle claims and disputes on your behalf. As a business owner, you can focus on growing profits while the PEO protects your earnings.

Ensure Compliance 

Employment regulations are a minefield for small business owners. PEOs have dedicated legal experts to ensure federal, state, and local regulatory compliance every step of the way. With every new law and regulation that passes, you and your team will have peace of mind knowing that you are compliant. PEOs also perform regular audits to identify and minimize risks and penalties.

National PEO vs. Local PEO

Quality of Service Matters

Choosing a PEO partner depends on your business needs and priorities. Most PEO providers offer payroll services, employee benefits, and HR expertise. However, the standard of service may vary between large, national corporations and smaller, local PEO providers.

A local PEO provides personalized customer service and builds stronger relationships with your team. Rather than calling 1-800 numbers, waiting for an email ticket, and being passed around by different representatives, you will receive direct phone access to your dedicated account manager, who understands your business and is invested in your success. Personalized customer service, responsive communication, and quick turnaround times improve your and your employees' experience.

Local PEOs are often more flexible with their HR services, customizing solutions depending on your unique business needs and budget. Additionally, they will have in-depth knowledge of how local employment laws and regulations affect your local business, ensuring you remain compliant and headache-free.

Simplify HR and Grow Your Business

Partner with a PEO

Thriving as a small business owner is complex—but it doesn't have to be. PEOs provide the infrastructure to simplify your daily processes and allow you to focus on what matters most: growing your bottom line.

Whether you're new to PEOs, already working with a PEO, or looking to make an HR change, Connectify HR is here to help. Schedule a free consultation with our local team of friendly, knowledgeable HR experts today.