For small businesses, a do-it-yourself approach to HR may seem like a good idea at first. It allows you to maintain control and costs. But what if you want your business to grow, be more productive or more competitive? How do you know when it’s time to get help and to outsource HR? Here are 5 of the most common signs.
Your staff is overworked.
You’ve finally reached your goals and business is growing, but so is the burden of HR-related tasks, such as compliance, payroll, employee benefits, workers’ compensation, training, and hiring. As employment laws and regulations increase, HR is becoming more than just about managing people. The job is more complex and time-consuming and as a result, may be too costly for your small business to manage.
Mistakes, fines and compliance issues are mounting.
Keeping up with employment laws can be a full-time job alone and compliance violations can be expensive. Even with a dedicated HR professional on staff, it’s difficult to stay on top of new state and federal laws and ever-changing reporting requirements and deadlines.
Your business is growing, your bottom line is not.
Your business is growing but you are not making money. Instead, you are spending more just to keep up. You may feel stuck trying to stay on top of growth and finding ways to be more efficient.
Keeping employees and attracting top talent is an issue.
Recruiting and keeping talent is more difficult today than ever before. With unemployment rates at a record low, it’s a candidate-driven market and top performers are shopping top companies for the best jobs -- with the best benefits. Yet, small businesses often struggle with providing competitive benefits packages.
You spend more time on HR-related tasks and less on your business.
Administrative HR duties are time-consuming which leaves you less time to grow and build your business.
Get back to business.
If you notice any of these signs, your business may benefit from outsourcing HR to a certified Professional Employment Organization (PEO). Basically, PEOs become co-employers with a business, meaning that there’s a contractual allocation and sharing of employer responsibilities. Your business still maintains control over operations and managing employees, while the PEO oversees HR responsibilities, such as payroll, workers’ comp insurance, and benefits administration. In turn, small businesses are able to focus on growing their business and improving overall efficiency.
With enhanced services and more capabilities, PEOs have proven to be more than an outsourced service – but a strategic solution delivering big benefits. According to a study conducted by McBassi & Company, companies that partner with a PEO experience:
- Higher growth rates. PEO clients grow faster, have lower rates of employee turnover, and have higher rates of business survival than other comparable small businesses. Seventy percent of companies that use a PEO report revenue increases and revenue growth that are twice that of comparable companies that do not use a PEO.
- Lower turnover rates. Turnover is costly. Businesses that use a PEO have 15 percent lower employee turnover than industry averages.
- Higher survival rates. Businesses that use PEOs have higher survival rates and are approximately 50 percent less likely to go out of business.
- More HR services at a lower rate per employee. According to a study by the National Association of Professional Employer Organizations (NAPEO), PEOs provide access to more HR services at a cost close to $450 lower per employee, compared to companies that manage their HR in-house.
READ MORE: How Pooling Employees Reduces Health Insurance Costs
Is your business growing? Are you looking for ways to reduce costs and liability? Do you need better benefits to attract qualified candidates and keep employees? Are you looking for ways to cut spending? Do you need top-rated health insurance and better employee benefits? If the answer is “Yes,” then it may be a good time to consider partnering with a certified PEO and get back to business.