A Professional Employer Organisation (PEO) Partner is an organisation which acts as a co-employer for your company. In short, it assumes many of your company’s Human Resource (HR) responsibilities. This ranges from onboarding, to insurance and payroll management. A PEO partner can greatly benefit small- to medium-sized businesses.
A study done by Extensis Group showed that a PEO could help small businesses grow 7%-9% faster and lowers employee turnover rate by 10%-14%. Companies who used a PEO also saw a 27% Return on Investment (ROI) based on cost-savings alone.
Utilising a PEO clearly comes with a host of advantages and leaves you with plenty of time to run your business. In this article, we will discuss how your company can benefit from engaging a PEO Partner.
1. Compliance with Laws & Regulations
Employment laws and tax regulations are ever-changing and complex. Even so, it is necessary for companies to stay up to date on these. Failing to do so can cost your company a lot of money in lawsuits and fines, it can also be detrimental to your company’s image. Staying updated on these laws can be time-consuming and confusing. This is especially so if your company has various offices in different countries.
A PEO provides guidance from seasoned HR Professionals who can prevent any legal compliance mishaps. They can help keep you in line when it comes to Overtime, Tax Contributions and Employment Agreements. This can ultimately save you money in the legal expenses you would have to pay in the case of a lawsuit, or any fines for non-compliance.
The experienced HR Professionals in a PEO are well-versed in the various laws and regulations that accompany employment. As such, they can help you avoid legal pitfalls and stay compliant with the employment laws within a country. This saves your company from a whole lot of trouble.
2. Easy Payroll Management
Payroll management can be an overwhelming task for many. Staying compliant with tax contributions, calculating the pay for each employee and writing out reports require plenty of calculation, and can result in confusion and errors if done manually.
Partnering up with a PEO can greatly decrease the time your company spends on payroll processing and reports. Most PEOs automate the payroll process, which eliminates the chance of human error in your payroll.
It also ensures that tax administration is handled accurately and in compliance with the regulations of the given country.
3. Cost-Effective Benefits
Employers often crack their brains trying to find ways to maintain employee retention. Having strong employee benefits makes a company attractive to potential candidates. Employees need to match up to, or even exceed the expectations of candidates in the market. However, selecting attractive, cost-effective benefits can be a challenging task.
A good PEO Partner will provide your employees with comprehensive, cost-effective benefits. Engaging a PEO takes away the costly administrative and regulatory burdens which usually accompanies planning out benefits.
A PEO offers all sorts of employee benefits including medical and annual leave, as well as health insurance and allowances. This enables your company to maintain a competitive edge in employee benefit offerings at an affordable rate.
4. Multiple Functions, One System
Handling multiple HR functions at once can be a headache, especially if handled manually. However, having several systems perform separate duties can be incredibly disorientating even for the most seasoned HR Team.
Most PEO Partners offer their clients access to HR Technology. This technology can help an employer and employees easily implement day-to-day HR tasks. Leave and claim requests and payroll are easily accessed and processed with the use of HR Software.
This simplifies HR-related responsibilities while increasing the efficiency in processing HR matters. Implementing a PEO often results in them offering you multiple functions and solutions in a single system. Not only is this convenient, it also greatly improves the employee experience.
5. Employee Development
Learning and development are important in any workplace setting. With the needs of the market constantly changing, employees need to consistently upgrade their skillset. To assist employees in their career progression, many employers offer some type of course for skill development.
PEOs may provide in-house courses through their own HR Software. Alternatively, some can also offer materials or sources for employee skill development, such as live training courses.
Having a growing mindset when it comes to learning can greatly help your company attract, retain and develop talent. All of which are pertinent in ensuring your company has strong, competent and skilled employees to carry out delegated tasks.
Ultimately, a PEO goes way beyond just helping a company with HR-related tasks. It also does plenty to ensure good employee welfare and experience. By helping a company address its HR Needs, a PEO leaves a company with plenty more time to focus on planning and decision-making within the organisation.
This does plenty in helping a company achieve business growth and talent retention.