6 ways a PEO can help small business owners

The frustration and stress involved with modern HR has resulted in an increase in the use of outsourcing solutions.

A PEO can help prepare business owners for legal and payroll changes associated with growth and make recommendations that will ensure compliance over time. (Photo: Shutterstock)

Owning and operating a small business is challenging in today’s market. And common issues that small business leaders often must handle on their own are the countless HR tasks and responsibilities that take a significant amount of time and energy to properly manage.

The frustration and stress involved with modern HR has resulted in an increase in the use of outsourcing solutions. But one in particular can prove to be valuable to small employers: professional employer organizations (PEO).

Studies from the National Associated of Professional Employer Organizations (NAPEO) have shown:

In addition to these statistics and other NAPEO findings, there are a few other ways a PEO can help small business owners.

1. Provide access to high-quality benefits

Recruiting and retention continue to cause headaches for employers, but small businesses can be even more impacted by today’s job market.

To combat the growing competition for talent, many employers (including small businesses) are actively enhancing their benefit offerings to appear more attractive to job seekers, while also keeping current employees happy to boost retention.

By working with a PEO, small business owners gain access to a wide-range of modern benefits that are the same quality as much larger organizations, such as:

Enhancing employee benefits can have numerous positive outcomes for smaller employers, with recruiting and retention success at the top of the list!

2. HR compliance assistance

One HR task that has grown in complexity is maintaining compliance with the numerous employment laws that are on the books at the federal, state, and local levels of government.

Since many small businesses don’t have in-house HR compliance personnel, these tasks tend to fall on owners or other business leaders. This can take away time from high-value business activities.

But working with a PEO enables small business owners to work directly with HR compliance and risk management professionals who help to ensure their clients remain compliant with all employment laws.

Not only does this free up time for business owners, but (more importantly) these professionals help to avoid the penalties and fines that can result from HR compliance issues.

3. Offer employee training and L&D programs

A recent HR trend has been the value employees and jobs seekers place on learning and development programs offered by employers.

Given the competition in the talent market, businesses have taken notice of the demand for L&D and are actively implementing programs to meet employee expectations.

Some PEOs offer learning and development services to their clients which can take several forms. The most common is to provide L&D programs through the PEO’s HR technology, which means employees can take advantage of these services on-demand.

Having a learning and development program can be a great differentiator that can help smaller businesses attract and retain talent.

4. Overcome health insurance concerns

Health insurance is a concern that’s shared by employers and employees. Health care costs continue to rise, and smaller employers face growing challenges within the small group market.

Not only can smaller business face increased costs, but they also could end up paying high premiums for insurance that doesn’t meet the needs of their workforce.

PEOs help overcome this issue by providing small employers with access to healthcare options that are similar to those offered by large organizations, and often at a reduced cost than what they could find on the open market.

Additionally, some PEOs can tailor health care plans to match the needs of a company’s employees. Considering how important healthcare benefits are for recruiting and retention today, this is one of the main benefits of working with a PEO.

5. Work with a strategic HR partner

Another important outcome for small businesses that work with a PEO is that they gain an HR partner that is there to help as a client grows.

A growing business has its own challenges, but a PEO can ease this burden. For example, if a client outgrows its current benefit offerings, the PEO can make recommendations and provide new options that satisfy the needs of the business in its current state.

Also, as a business grows, so too does its payroll and certain legal requirements. A PEO can help prepare business owners for these changes and make recommendations that will ensure compliance over time.

And should business owners have questions or concerns, they can easily contact their PEO for assistance with a variety of HR needs such as payroll, risk management, benefits, and more.

6. Improve HR tasks with modern technology

Technology has found itself infused in just about every aspect of our day-to-day routines and activities, and HR is no exception.

Today, even smaller employers can gain access to HR technology – often through outsourcing solutions like a PEO.

Through technology, HR-related tasks can become much easier for small business owners and employees to complete. Some examples include:

By working with a PEO, small business owners can use HR technology that can help simplify many HR tasks while also improving the employee experience.

Turning to an outsourcing solution, such as a PEO, can help business owners who feel overwhelmed with the many HR responsibilities that must be managed each day. By having more time, leaders can focus their efforts on other areas of the business that can facilitate growth.

And as a small business grows, their PEO partner will be there to provide assistance along the way.

Mike Altiero is the digital marketing manager for Extensis, a regional PEO headquartered in the New York City area.

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