When HR responsibilities start accumulating and related costs escalating, businesses owners turn to professional employer organizations (PEOs) to get back things on track.
Nearly 200,000 businesses across different verticals in the United States work with a PEO. Most of them are small to midsized companies who want to channelize their focus on business development through strategic thinking without being consumed by HR activities.
If you run a business with one of your most pressing challenges being managing day-to-day HR tasks, working with a PEO may take all your worries related to human resources.
However, if you’re new to a PEO then this post is for you. Read on to learn what a PEO means and how it can help your business.
A PEO is an HR outsourcing firm that enters a co-employment agreement with your company to take care of HR-related aspects that you as a business owner may find challenging to handle alone, especially when you tap into other countries.
Through the contractual sharing of employment responsibilities and liabilities, the PEO is responsible for HR processes such as payroll, benefits, worker’s compensation and local compliance. On the other hand, your organization retains the responsibility for maintaining direction and control of the day-to-day operations of your employees and business.
Let’s face it – running a business is challenging and time-consuming. As a business owner, you already have a lot on your plate from creating go-to-market strategies to implementing them successfully to gain an edge over your competitors.
If you are a small or midsized business with no dedicated resources to handle HR, payroll and other employee-related services or can’t afford benefits that help attract and retain the best talent, you can end up spending half your day dealing with HR and employee-related issues.
On the other hand, partnering with a PEO can free up your valuable time to focus on growing your business. In fact, according to the National Association of Professional Employment Organizations, companies that use PEOs grow 7% to 9% faster than companies that don’t use PEOs.
Moreover, a PEO reduces the expenses associated with hiring a dedicated HR team for your company.
When you decide to partner with a PEO service provider, you’ll sign a co-employment agreement – also known as a co-employment relationship. Through this agreement, you and your PEO service provider contractually assign and share the employment responsibilities and liabilities.
Typically, you manage your company’s direction and business operations including marketing operations, offering services or products to your buyers. On the other hand, your PEO service provider will provide a comprehensive HR and benefits package to your employees.
Note*: You still retain control on key HR decisions. You decide what benefits to offer and who to hire. Your PEO service provider then takes care of the onboarding process i.e., day-to-day administrative activities.
At a minimum, a PEO can help you with the following matters:
Along with providing assistance with all these matters, you can also count on your PEO service provider for HR support. Your PEO can help you make key employment-related decisions so that you can prepare yourself better for the future.
It’s important to know what PEO cannot facilitate before you decide to partner with a PEO. This will also help you understand whether or not working with a PEO is the right decision for your company.
So, if you’re running a business with your own legal entities in target countries but don’t have the dedicated HR resources to serve your employees’ needs. That’s when PEO service providers come in to make sure your workforce receives paychecks on time and has access to required benefits.
Note*: Not all PEOs provide all services. Some may only provide payroll-related assistance but not benefits administration. Therefore, it’s important to consult with providers to discuss your needs so that you can work with the one that can fully cater to your requirements.
InfoStride provides PEO services to handle all of your HR needs with a goal to make your life easier and provide your workforce with high-level support. Our PEO services to businesses across different verticals span everything from talent recruitment & management, payroll, benefits, HR, risk management to local compliance.
If you’re still in doubt about whether or not PEO is the ideal solution for your company, talk to our experts today and get all your doubts cleared in a free consultation session.
Partnering with a Professional Employer Organization (PEO) service provider might be a big step for you but it can bring invaluable benefits to your business. Using the services of a PEO can mitigate costs and risks that you otherwise have to deal with without a dedicated HR department within your organization.
Above all, working with a PEO as a co-employer is a win-win situation for you and your employees especially if you’re running a small or midsized business.
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