Risk management is a critical component of running a business. Strategic risk management usually includes protecting employees' safety via insurance protection, mitigating legal exposures via compliance, and avoiding hefty non-compliance fines due to unfamiliarity with the local laws.
Any organization can benefit from partnering with a PEO, even companies with an in-house HR team. PEO is accountable for establishing and upholding a secure working environment as a co-employer for your employees.
Here are a few examples of how working with a PEO can significantly enhance your risk management efforts.
6 Ways on how PEO can Help in Risk Management
1. Risk Identification
Before we talk about risk management, let's use this checklist to identify your types of risk from a business perspective. Risks including:
Many businesses resort to professional employer organizations (PEOs) for assistance and support during these trying times.
Natural disasters or risk events can happen at any time, so it's beneficial for your business to have access to professionals that can assist you in minimizing and managing your potential impact brought by the financial or business crisis.
It's time to work with a PEO like AYP to build business expansion procedures and get quick solutions to onboard your employees if you have 3 out of 5 identified risks listed above.
2. Accelerate business growth
Risk management is a crucial component businesses need to take into account. It prepares businesses for any potential challenges on the way.
By partnering with a PEO service provider, your co-employer will handle all the necessary paperwork and provide regulatory compliance assistance. In such a way, businesses can focus entirely on their primary missions and risk mitigation plans to improve productivity and profitability.
Businesses using PEOs saw (1):
Your co-employer, PEO, can help to speed up your company growth, especially your business presence. Collaborating with a PEO to work together on the risk analysis of your expansion plan is essential if you want to be sure that your HR and project team can function as a unit during challenging times.
Managing compliance is the main advantage of working with a PEO, particularly if you are expanding abroad and are unfamiliar with the local laws and regulations. The most typical ones would be social security regulations, employee compensation, and local tax laws.
Employment laws can alter anytime and vary across different countries. Therefore, despite being crucial, staying compliant with multiple countries' latest rules can be challenging and susceptible to resulting in penalties, loss of earnings, or even lawsuits.
PEO's in-country experts are well-equipped about the legal requirements in the country where your company is venturing. Additionally, they will continuously keep you informed of the most updated legal requirements and offer your business guidelines on how to react to developments that will affect your business.
However, please note that PEO is the perfect choice if you plan to establish your business presence in a location where you already own a legal entity.
On the other hand, if you are planning to hire globally without any intention to set up any local entities, then EOR will be another perfect alternative. Learn the differences between PEO vs. EOR.
4. Worksite Security
Workplace security is a requirement for businesses to protect their sensitive data and information. The items include staff information as well as corporate goals and strategy.
A breach of employee privacy or the exposure of sensitive information could result in severe consequences for the company, both financially and publicly.
Often, PEOs offer cloud-based HR software that assists you in managing your day-to-day HR functions. In addition, this software is typically very secure to keep your data safe; leave your worries about data leakage from manual payroll reports to HR digital solutions to your PEO.
Find out more about the 5 Vital Aspects of The Ideal Payroll System and evaluate your current payroll system.
5. Operational Risk
All of the operational risks have a negative financial risk impact. However, the operational risk might also have other effects that are more challenging to measure.
For instance, employee hiring headcount froze due to financial budgets or inadequate training of the employees. In such a scenario, you can delegate any relevant HR tasks to your co-employer for hiring solutions.
PEO will save your company much time by enabling you to hire immediately and take care of your employee's benefits and health insurance issues so you can focus on your business growth.
6. Cost savings
According to NAPEO (2), the ROI of engaging a PEO is 27.3 per cent in cost savings alone. In addition, hiring in a PEO arrangement ensures the benefits packages are competitive from the PEO's constant updates and guidance, thus, resulting in lower employee turnover by 33%.
Better insurance coverage at a lower cost is another cost-saving perk that PEO can offer.
Insurance companies view PEOs as a significant business, bringing in more customers and giving PEOs more negotiating leverage, leading to better insurance deals with lower compensation insurance premiums.
How can AYP assist you in Risk Management?
PEOs specialize in helping small and mid-sized enterprises, creating a differentiation compared to consultants targeting large clientele.
- Risk identification: provides you with a remote work solution if your employees are reluctant to return to the office.
- Risk management: decreases employee turnover and accelerates business growth by reducing business risk.
- Compliance: AYP has 7 offices in Asia with more than 100+ payroll and legal experts.
- Worksite security: AYP global pay is a perfect choice to mitigate this risk with a lower cost to spend on high technological solutions.
- Operational risk: We have assisted our clients in expanding their businesses quickly and easily across South East Asia and now beyond APAC.
- Cost savings: Reduce spending by up to 60% and enjoy savings in compensation, insurance, and benefits.
Get your personalized plan and learn how we can assist your business growth.