Getting support with HR is a smart move, especially for small to medium businesses. Businesses can benefit from cost-effective pricing and service delivery provided by dedicated HR service providers. Unfortunately, it’s not always so clear what kind of HR solution to choose. Businesses have a wealth of options these days for HR services.
|Professional Employment Organizations||PEOs offer a complete solution that allows you to handle as little or as many HR tasks as you want. They take the form of a co-employment structure. The PEO handles HR functions like payroll taxes and other worker-related responsibilities, while the employer still manages and oversees everything.|
|Administrative Service Organizations||ASOs are very similar to PEOs in that they can administer a wide range of HR-related functions. This can include payroll, benefits, compliance, and even strategic planning. One major difference is they do not offer the co-employment aspect of a PEO.|
|Employer of Record||Like PEOs and ASOs, EORs handle a wide array of employment-related functions, with a key difference. The EOR legally employs the individual who works for you, rather than co-employing them with you (as with a PEO).|
|Process Outsourcing||Here, companies choose function-specific firms that assume those duties on a contractual, outsourced basis. They usually focus on complex tasks like recruitment.|
|Online or app-based HR||These services are also usually function-specific and focus on a specific transactional aspect of HR (like payroll or benefits administration).|
|Individual contractors||Some employers, especially smaller ones, may opt to have one or two contractors come in to manage HR tasks for them. These contractors work on a contract basis, sometimes only part-time.|
Each of these business models has its benefits, but overall, PEOs stand out among all the alternatives. The proof of the PEO model’s success is in the numbers. Research shows that PEO clients generally have lower costs, faster growth, and dramatically lower failure rates than non-PEO clients.
However, what's the reason? What attributes make PEOs so beneficial?
1: A PEO is unique in that it can help you exit the role of the employer. In a way no other HR vendor can.
The intentional design of a PEO is to get employers out of the employer role. Allowing business owners and executives to focus their energies entirely on core, revenue-generating, business-growing activities. Through a co-employment model, the business itself no longer has to deal with burdensome liabilities like payroll taxes.
In other words, a co-employment situation can accomplish two things. First, it relieves the employer of some of the burdens related to employing workers. At the same time, co-employment allows the employer to maintain total management control over their teams. No other method of outsourcing HR services can accomplish both at the same time!
2: A PEO can do everything – and do it all well
A PEO can help you avoid the time-consuming tasks typically required to support an HR department. Tasks like payroll processing, employee benefits, or retirement programs can take away a business owner's focus from core operations.
PEOs can go even further than others by offering dedicated HR experts. Our experts possess in-depth knowledge of specific aspects of HR to support both small and mid-sized businesses. This support goes beyond others, assisting in turning the HR function from a cost center to a value generator.
Common services may include, but are not limited to:
· Payroll management
· Employment-related tax handling
· Benefit programs, including health insurance and retirement programs
· Benefits Administration
· Labor law compliance
· Recruitment and retention
3: A PEO can give small and midsize businesses enterprise-like HR power
A PEO facilitates the efficiencies that result from economies of scale. For instance, PEOS have the ability to provide a huge range of benefit programs and Large Group Health Plans. Typically these economies of scale are only available to larger corporations.
The best part is, that they can offer these services at very affordable prices. Often much lower prices than what regular businesses could qualify for on their own. That can turn even small businesses into powerhouse recruiters and turn HR services into engines of business growth.
Choosing the right HR support is important, especially for small to medium-sized businesses. There are different options available depending on your business needs but a PEO provides a comprehensive solution. PEOs provide a unique arrangement where they handle HR tasks, allowing business owners to focus on their core activities. This setup brings the advantage of both reducing the HR tasks and keeping control over the team.
What makes PEOs truly special is their ability to give small and midsize businesses the benefits of large corporations. They can offer various benefits and plans at affordable rates, thanks to their economies of scale. Additionally, PEOs can provide specialized HR experts to assist a business with any HR-related questions or concerns. The proof is in the numbers: PEOs lead to lower cost, faster growth, and less chance of failure.
Discover the benefits of partnering with CoAdvantage, a leading Professional Employer Organization (PEO) in the country. Our PEO services assist small to medium-sized businesses in managing HR tasks, benefits, payroll, and compliance. Reach out to explore how we can help improve your human resource that drives business growth!