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How to Determine If a PEO is Right for Your Business


peo hr administrationThe administrative tasks associated with running a business can be daunting. Between payroll, health insurance, workers’ compensation issues, and other human resource (HR)-related functions, a business owner can spend more time handling paper work than managing and growing their business. Before you know it, instead of focusing on growth opportunities, you find yourself bogged down in paperwork and red tape.

A Professional Employer Organization (PEO) is a company that specializes in the management of administrative and human resource functions for businesses. Think if it as outsourced human resources.The comprehensive HR-related services they provide allow business owners the freedom to focus on the operational aspects of their business and growing their bottom line. When you work with a PEO, you will continue to oversee the day-to-day management of your employees, and they will handle HR administration and the associated paperwork.

Is a PEO the right fit for your business? Read the situations below to help you make that decision.

    1. You and/or your HR staff don’t have the time it takes to become experts in employment laws and regulations.

      Human resource functions have grown increasingly complex with new laws and regulations constantly being introduced. To stay current on the changing rules and requirements, a business owner is often forced to dedicate time and resources that are already scarce to the project. It should go without saying that these resources could be better invested in other functions of keeping the business running smoothly.

      There are a multitude of laws surrounding recruitment, payroll, tax forms, health benefits, workers’ compensation, risk management, and 401(k) plan administration. Depending on your industry, you could even have specific requirements that apply to your business, such as OSHA safety training or HAZMAT and HAZWOPER training and certification obligations. Navigating the paperwork and red tape surrounding each of these functions can be overwhelming and time-consuming. A PEO can help mitigate some of the time-costs associated with managing your employees and the myriad of increasingly complex laws and regulations impacting employers and their businesses.

    2. Your staff has outgrown your HR-Resources.

      It is a great feeling knowing that your business has grown to the point where you’ve had to add additional staff in order to keep up with demand. The downside, however, is the added responsibility that falls on the shoulders of your HR-staff, or in some cases, you. The same way that you may have to increase your staff to keep up with customer-demand, you may have to consider adding to your HR staff to keep up with the responsibilities associated with managing the influx of new employees. Rather than investing in a new employee(s), why not hire a team of HR experts?  A PEO could be the best strategic decision you make to help your business manage a growing staff.

    3. You want cost-saving ways to administer your employees’ health benefits.

      Happy employees work harder, call in sick less often, and are more productive. One of the best ways to increase your chances of hiring and retaining your industry’s top talent is to offer an attractive benefits package. However, administering your employees’ health benefits can be daunting—especially when you take into account the new laws and regulations included in the Affordable Care Act. A PEO can help organizations navigate the ins and outs of benefits administration—saving them from incurring costly fines and penalties. When your employees are happy, your business benefits from lower turnover and better employee relations.

When the human capital-cost of managing HR operations becomes too high, a PEO may be the right fit for your business.  They work as a trusted partner, and have the resources and expertise to ensure the job gets done right. A PEO can also guarantee that your employees have access to the benefits that they want and need.  Best of all the, PEO model is fully scalable and can allow you to grow as fast as your business demands.

peo hr administration

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