We know that small business owners often have more jobs than they’d like. You’re the visionary, the boss, the accountant, the marketer — and often, the HR manager. You thrive on variety, but one duty surely frustrates you: managing your employees’ HR and benefits needs.
Between enrollment paperwork, payroll, compliance, and other administrative tasks, HR can monopolize your time. The Society for Human Resource Management estimates that HR-related duties devour a staggering 20-40% of small business owners’ working hours. That’s precious time stolen from growing your company and pursuing your passion.
Outsourcing these duties to a Professional Employer Organization (PEO) could give you back those lost hours while saving money. Let’s take a look at some compelling benefits of PEO partnerships for time-strapped business owners like you.
Save 20-40% of Your Time
As the Small Business Administration notes, the average small business owner spends up to 40% of their schedule on HR and administrative tasks. From payroll processing to benefits management, these duties demand a big chunk of time and effort.
By outsourcing these responsibilities to a PEO, you regain all those hours for higher-value work. PEOs specialize in performing essential HR functions so you don’t have to:
- Employee benefits administration like enrollment, modifications, and COBRA
- Payroll processing including tax filing and check issuing
- Workers’ compensation insurance and claims management
- Unemployment tax administration and fraud investigation
- Employee records maintenance like schedules, hire dates, and more
With these time-consuming tasks off your plate, you can refocus your energy on the work only you can do: guiding your company vision and enriching your customers. Reclaiming 20% or more of your time is a priceless productivity boost.
Access Expertise with Reduced Cost
Staying current on HR best practices and compliance takes considerable effort. While larger companies employ entire HR teams for this purpose, smaller businesses rarely have the scale to justify an HR manager salary.
Partnering with a PEO gives you access to HR expertise without the cost of hiring more people. PEO staff are specialists in HR administration, employment law, benefits management, and compliance issues. They stay on top of regulation changes so you don’t have to.
This expertise ensures you remain compliant with federal and state laws without having to monitor updates yourself. It also provides guidance on HR best practices to minimize legal risks. With a PEO as a partner, your business gains a complete HR department for a fraction of the cost.
Lower Employee Health Insurance Costs
Rising health insurance premiums are a constant challenge for small business owners. As costs increase yearly, you’re faced with choosing between lower coverage, higher employee contributions, or absorbing the inflated premiums yourself.
PEOs can reduce this financial burden through strength in numbers. By pooling thousands of employees across their client companies, PEOs gain buying power with insurance carriers. This allows them to negotiate better rates and terms than any individual small business could obtain.
According to the National Association of Professional Employer Organizations, PEO-negotiated plans have premiums that are 5-15% lower on average. Switching to a PEO could provide better insurance coverage at a reduced cost year after year.
Ensure Compliance and Reduce Legal Risks
With HR regulations constantly evolving, compliance is a moving target for small business owners. It’s challenging to keep up with new employee leave laws, antidiscrimination rules, occupational safety standards, and more. Noncompliance exposes you to substantial legal risks in the form of hefty government fines or lawsuits.
Partnering with a PEO ensures you stay compliant as regulations change. PEOs maintain comprehensive knowledge of federal, state, and local HR laws across all jurisdictions. They implement legally compliant policies and procedures tailored to your business needs. This protects you from the risks of unintentional noncompliance that could lead to financial damages or reputational harm.
Streamline Payroll Tax Administration
Payroll taxes are often cited as one of the most burdensome administrative tasks for small business owners. The rules surrounding withholdings, documentation, and filing are convoluted and always changing. Keeping up with new requirements is time-consuming and requires tax expertise.
PEOs make payroll administration easy by handling everything for you. Their tax and compliance specialists stay current on all payroll regulations. PEO services include calculating withholdings for each employee, filing taxes on your behalf, and distributing paychecks. All you have to do is approve employee hours — the PEO takes care of the rest!
Access Discounted Workers’ Comp Rates
Workers’ compensation insurance is a significant cost for many small businesses. Because risks are pooled and pricing is regulated, there are limited options to reduce premiums as a standalone small business.
By aggregating thousands of employees, PEOs achieve much larger risk pools. This allows them to negotiate discounted comp rates unavailable to individual small businesses in most states. Partnering with a PEO can lead to considerable savings on your annual workers’ comp premiums.
Efficient Benefits Management
Offering competitive benefits is key to attracting and retaining top talent. However, managing multiple benefit plans — health insurance, retirement accounts, flexible spending accounts, etc. — pulls your focus away from critical business priorities.
PEOs lift this administrative burden by providing consolidated benefits management. They handle the legwork of researching plans, enrolling employees, managing life events, and resolving claims disputes. With a PEO partner, you spend minimal time on benefits administration.
Guidance with Hiring, Performance Issues, and Terminations
Bringing on new employees or letting go of existing ones requires meticulous adherence to legal protocols. One misstep during hiring, discipline, or termination can lead to an expensive lawsuit.
PEOs offer HR guidance to safely navigate these sensitive situations. Their expertise helps you hire candidates efficiently while avoiding discrimination pitfalls. They also provide coaching to resolve performance problems legally and terminate employees without wrongful discharge liability.
Ready to Reclaim Your Time and Refocus on Growth?
As an ambitious small business owner, you likely started your company to pursue a passion, not to spend your days buried in administrative tasks. Don’t let HR duties distract you from higher priorities.
Partnering with a PEO helps you maximize your time investment in productive work that drives growth. Let the HR experts handle the tedious tasks while you focus on the big picture. With the right PEO partnership, you can reduce HR administration by 20% or more, lower costs, minimize compliance risks, and operate more efficiently.
Isn’t it time you got back to doing what you love? With a PEO as your partner, you can delegate the duties draining your schedule and gain back more time for the work only you can do. Research PEOs who serve businesses like yours to start improving productivity and profitability. Your time is valuable, it’s time to make the most of it.
