Topic Outsourcing HR / PEO

5 Benefits of HR Outsourcing

5 Benefits of HR Outsourcing

There is a reason over 175,000 small and mid-sized businesses in the United States work with a Professional Employer Organization (PEO). Through outsourcing HR services, companies have growth opportunities they may not otherwise experience. 

PEO partners are an excellent option for a variety of reasons. Below are 5 such reasons why many companies outsource HR functions to a PEO.

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Lowered Costs

HR experts and specialists command high salaries for their experience. Not only do companies face those fixed costs, but there are also costs associated with finding, interviewing, and training a new hire. Whether those activities fall on you or your existing in-house HR team, that is a time-consuming and draining process. 

With a PEO, you get access to a team of HR professionals who are available whenever you or your in-house HR team needs them. You no longer have to worry about hiring and training new HR team members, you can focus your existing resources on your core business needs.

Your PEO can also save you money while offering your employees a best-in-class benefits package. Through economies of scale, your PEO has negotiated Fortune 500 rates for healthcare, allowing you the ability to provide health benefits to your employees at rates you can afford. Your PEO can also give you access to more affordable retirement plans and workers' compensation coverage, further reducing your overhead and creating loyalty from your team by providing them with the benefits they seek.

Mitigate Chances of a Lawsuit

Operating a business presents challenges, regardless of industry. There are complex federal, state, and local employment laws that must be strictly followed. Trusting this awesome responsibility to one in-house employee is ripe for disaster.

By partnering with a PEO, you get access to a team of trusted HR experts who work tirelessly to keep your business compliant. This level of risk management can reduce the likelihood of employee lawsuits from employment law violations. 

By providing your company with adequate training procedures and a training program, your PEO also helps to reduce the chances of employees suffering injuries or violating discrimination laws. Providing your company with complete risk management ultimately helps reduce your company’s financial burden.

Improve Company Culture

Fostering a positive work environment is important to attracting and retaining top talent in your industry. By removing the HR administrative burden from your internal HR team, your PEO allows your internal team the ability to focus on your core business needs.

Creating a company culture that thrives benefits your employees and your company. Letting your internal HR team focus on giving your employees what they want helps to create loyalty within your organization. Loyal employees are more efficient and productive employees. Not only can this help you retain your employees, but a positive company culture can also attract other employees to your organization.

Time Savings

HR administration tasks are time-consuming. These mundane tasks include:

  • Benefits administration
  • Payroll
  • Tax remittance
  • Drafting policies
  • Creating training manuals
  • Employment law compliance

Depending on the size of your company, these duties could be a full-time job. By outsourcing these and other HR administrative tasks, you free up your internal team, giving them the chance to be more productive and efficient. Your PEO complements your internal team by giving them room to thrive.

Better Offerings

Your company's benefits package can make the difference on whether your employees stick around or go work for a competitor. Small businesses often find it cost-prohibitive to offer benefits. Beyond that, the administration of those benefits causes confusion and can be a serious time drain for the responsible employee.

Through a PEO, however, you can offer Fortune 500 benefits at Fortune 500 prices. Your PEO is able to negotiate with providers to get you savings on benefit offerings. The money you save can be reinvested back into your company to help you hire more stellar employees and keep growing. 

PEOs Help You Save

Partnering with the a PEO can save you time and money. Your internal HR employees can focus on your core business needs helping you expand your business faster. Your employees get the benefits they want at prices both you and they can afford.

The right PEO helps your company save money while increasing employee productivity. When you have a positive company culture, stellar benefits offerings, proper structure, and legal compliance, your company has the best opportunity to expand and grow. Through your PEO, you can provide your team what they want while setting the example of what it looks like to thrive in your industry.

The No B.S. Guide to Human Resources Strategy for Business Performance

Mark Morter

Mark Morter

As the National Sales Director, Mark has over 25 years of sales and sales management experience, 14 of which have been in the PEO industry. He has built, expanded, and turned around sales teams and markets. Mark is known for driving growth and revenue and has been recognized for the recruitment and development of Award-winning sales professionals.