Many people dream of becoming entrepreneurs, and often the biggest...
Letting technology do the heavy lifting for certain monotonous tasks...
As the world leans into the decentralized era,...
Managing payroll can be complicated in any...
December 14, 2020
As an entrepreneur, you may be so busy managing employee benefits, recruiting, training and performing all of the other people management responsibilities that you don’t have time to scale your business. Some business owners instead choose to work with a professional employer organization (PEO). These firms can handle many employer responsibilities for you on an outsourced basis, freeing up time for you to focus on your business.
Whether you’ve hired outsourced partners before or not, you’re probably well aware that working with third-party companies can have their pluses and minuses. It goes without saying that PEOs are no different — you may find that a PEO is the right choice for your business, or you might discover that these aren’t the ideal partner for you at the moment.
To help you make a decision on whether or not to partner with a PEO, check the following pros and cons of working with these organizations.
As an employer, there are certain responsibilities you have to your employees, many of which are also required by labor and payroll regulations. If your business is small, you may not have the bandwidth to address all of these, but a PEO would be able to manage it all for you and ensure that you’re in compliance with all local, state and federal laws.
For instance, the PEO firm could oversee benefits administration, recruiting/onboarding, unemployment requirements, workers’ compensation claims, employee leave, drug testing, offboarding and much more.
If your business had to hire an HR and benefits department, you’d be paying the salaries and benefits for those staff members, but if you use a PEO, you’ll only pay for the time and services that you use. This way, you aren’t spending money on services you don’t actually need — you’ll only pay for what your business requires. You can easily scale your use of the PEO firm up or down based on how your business is doing at any given moment.
When you outsource your PEO, the third-party firm will invest in the technology and systems that you need to keep your HR department running smoothly. Due to that, you won’t have to buy expensive payroll and HR technology or additional computers for staff members.
It’s likely that you won’t be the sole customer of your PEO, and therefore, you may have trouble getting personalized attention from the organization. Ensure that you partner with a company that has a dedicated rep who is assigned to your business so you won’t be sitting on hold with a customer service line if you need assistance.
Even if you outsource your HR and benefits responsibilities, your business is still responsible for maintaining a compliant program. Therefore, you should look for PEOs with compliance guarantees that ensure that any issues become their financial responsibility, and you should always review testimonials and reviews from other customers to ensure that your PEO firm is trustworthy and on top of all compliance guidelines.
When employees have issues that require HR or benefits experts, it can be a challenge to direct them to a third-party company. In many cases, businesses want to own the HR responsibility so they can maintain a strong company culture around it. Therefore, always use a PEO firm that shares the same culture and values you do to ensure a seamless experience for your employees. Also ensure that the PEO creates an employee portal so that staff members can log in at any time and review their payroll, benefits and other issues independently.
After evaluating whether the pros outweigh the cons, consider contacting a PEO that might work with your needs so that you can focus on scaling your business while your employees remain well protected.
Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.
Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.
Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.
As the world leans into the decentralized era, Web3 startups are at the forefront, exploring the possibilities of blockchain, cryptocurrencies,...
Managing payroll can be complicated in any industry, but it becomes especially challenging in the consumer goods sector, where...
Nonprofit organizations often rely on grant funding to carry out their missions, whether that involves community development, education, healthcare, or...
In today’s hyper-connected media landscape, safeguarding intellectual property (IP) and expertly managing contracts are indispensable for success. Media companies—from traditional...
Managing your business’s finances can often feel like juggling too many tasks at once, especially when you’re trying to keep...
One of the most valuable sources of talent for startups is the pool of passive candidates—individuals who aren’t actively...
Cash flow is the lifeblood of any business, and this holds especially true for Software as a Service (SaaS) companies....
Nonprofits play a vital role in addressing societal issues, but managing the intricacies of human resources (HR) within the constraints...
When you're leading a startup, your time is precious. Every decision, every action needs to be focused on growing your...