Has employee engagement taken a backseat? Are turnover rates rising? Here's how to put the “human” back into HR for a more engaged workforce.

Human Resources has long been the heart of every business, responsible for managing the people who help it reach its goals. Yet, as a business grows, HR can sometimes shift from people-centric to process-heavy, becoming bogged down in paperwork, and time-consuming administrative tasks. Enter the Professional Employer Organization (PEO)—a solution to lighten the load and allow HR to refocus on what truly matters: people.

What is a PEO? The concept of a PEO emerged as small businesses sought innovative solutions to manage increasingly complex labor laws and growing HR-related administrative tasks. The idea was simple: small and medium-sized businesses could outsource certain HR functions to a third-party organization to gain more expertise and reduce administrative burdens.

Under a PEO arrangement, the PEO becomes the co-employer of your employees. As the business owner, you retain control of your business and continue to manage your employees, while the PEO takes care of the bulk of payroll and other HR-related services. Most importantly, the PEO and your company share employment liability. Over time, PEOs evolved to offer a wide array of services, including payroll processing, benefits administration, risk management, and compliance support. By leveraging economies of scale, PEOs enable small businesses to access competitive benefits and more resources often available only to large corporations.

Today, PEOs are recognized for their ability to streamline HR functions, prevent legal risks, save time, and lower costs. A recent study conducted by noted economists Laurie Bassi and Dan McMurrer shows that businesses that use a PEO have a growth rate that's 2x faster, have 12% lower employee turnover, and are 50% less likely to go out of business. 

According to the National Association of Professional Employer Organizations (NAPEO), more than 523 PEOs in the United States provide services to more than 200,000 small and mid-sized businesses, employing 4.5 million workers. This growing industry underscores the growing need for solutions focusing on efficiency with employees in mind.

➡️➡️READ MORE: New Research Shows - PEOs are a Powerful Tool for Small Businesses

PEOs are uniquely positioned to help employers focus on their people. Here are just a few ways: 

1. Streamline Administrative Tasks. One of the primary services offered by PEOs is handling time-consuming administrative tasks, as well as payroll processing and benefits administration. By outsourcing these functions to a PEO, HR teams gain valuable time to focus on other areas, such as employee engagement, training, and development.

2. Access to Better Employee Benefits. PEOs enable businesses to offer employees comprehensive benefits packages, including 401(k)plans, health, dental, life insurance, and dependent care. Because PEOs pool employees from multiple companies, they can negotiate better rates and provide access to enterprise-level benefits typically reserved for larger employers. These enhanced benefits boost employee satisfaction and support employers in attracting and retaining top talent, creating a more people-centered workplace.

3. Professional Development Support. The workforce has undergone significant shifts in recent years, with remote work, hybrid models, and a greater emphasis on work-life balance becoming the norm. Employees now expect personalized support, flexibility, and career development opportunities. A people-first HR strategy ensures businesses can adapt to these evolving demands. 

By partnering with a PEO, businesses are able to provide access to valuable resources and guidance for employee training and professional development, including leadership programs and performance management tools. These resources empower employees to grow in their roles, enhancing morale and long-term engagement. Showing a commitment to your employees highlights that your business values them as individuals, not merely as contributors to profits.

4. Compliance Guidance. Employment laws and regulations are constantly changing, and staying compliant is an ongoing challenge. PEOs offer expertise in navigating federal, state, and local laws, as well as on-site risk management guidance on compliance training, contributing to a safer workplace. By ensuring compliance, PEOs reduce the risk of costly legal issues, allowing HR teams to focus on creating a supportive and inclusive environment for workers.

5. HR Expertise on Demand. PEOs provide access to HR professionals who can help with workforce planning and difficult employee issues, such as conflict resolution. This expertise empowers HR teams to address sensitive matters with confidence while maintaining a people-first culture.

6. Accurate and On-time Paychecks. PEOs handle all aspects of payroll, including tax filings and regulatory paperwork. And you have the assurance that paychecks are accurate and delivered on time.

7. Stronger Workplace Culture. Taking care of employees takes care of business. When employees feel they are being taken care of, they are productive and committed to your success. According to a Gallup study, companies with highly engaged employees are 38% more productive than those with disengaged employees.  

By partnering with a PEO, HR teams can dedicate more energy to cultivating a positive workplace where employees feel valued, heard, and motivated. This includes promoting open communication, encouraging teamwork, and recognizing employee achievements. 

8. Easier Access to HR. Working with a PEO is similar to having a dedicated HR department. Employees have access to a wealth of knowledge and resources, along with support from a team of HR experts. For example, the arrangement makes it easier for employers to onboard new employees and streamlines processes, such as paid time off requests.

9. Attracting Top Talent. Businesses that prioritize their people stand out to prospective employees. Offering competitive benefits, promoting diversity and inclusion, and providing opportunities for advancement can make the difference in attracting top-tier talent and preventing them from being snatched up by competitors.

PEO IN ACTION 

Consider a growing startup with 40 employees. The HR team of two is overwhelmed with managing the responsibilities of payroll, onboarding new hires, and ensuring compliance with new changes in labor laws in the multiple states where many employees are working. Employee engagement has taken a backseat, and turnover rates are rising.

By partnering with a PEO, the startup gains the support of payroll processing and benefits administration, as well as access to a more competitive health plan which boosts employee satisfaction. Their guidance also helps the startup streamline HR processes, as well as reduce legal risks and avoid costly compliance violations. With these tasks handled, the HR team can focus on creating a personalized professional development program and organizing team-building activities. The startup sees a significant improvement in employee morale, productivity, and retention—all because they refocused on their people.

"It's About People, Not Paper,"

-- Lee Yarborough, President & Co-founder of Propel HR

PEOPLE OVER PAPER

"People over Paper" is a principle embraced by Propel HR founders, Brax Cutchin and Lee Yarborough, from the very beginning. It's about shifting priorities and focusing on employees. More than 25 years later, this philosophy continues to drive us.

It’s time to reimagine HR and remember that the “human” in Human Resources is what drives innovation, productivity, and progress. By partnering with an IRS-certified PEO, like Propel HR, businesses can offload time-consuming administrative tasks, access valuable HR expertise, tools, and resources, and invest in their employees’ well-being and growth. The result? A thriving workplace culture, a more engaged workforce, and a stronger foundation for long-term growth. 

INTRODUCING THE PROPELLERS!

We're excited to introduce the mightiest of HR superheroes - The Propellers! Dedicated to solving your HR, compliance, payroll, benefits, and technology challenges with unparalleled expertise, The Propellers of Propel HR are ready to protect and empower your business. To learn more, visit ThePropellers.com

About Propel HR. Propel HR is an IRS-certified PEO that has been a leading provider of human resources and payroll solutions for 25 years. Propel partners with small to midsized businesses to manage payroll, employee benefits, compliance and risks, and other HR functions in a way that maximizes efficiency and reduces costs. For more information, visit propelhr.com