Every business needs to improve its ROI. Your bottom line may not be the only measure of your company's success, but it is certainly a vital one.
Improving your ROI is easier through comprehensive HR outsourcing to a professional employer organization (PEO). PEOs are a unique outsourcing solution that takes on the administrative burdens of your company, leading to significant cost savings. Contrary to common belief, it does not mean you lose control over how you handle, hire, and fire your employees. Instead, your HR team is freed up to focus on the strategic versus the transactional paperwork and set employees up for success.
Partnering with a PEO gives an average ROI of 27.2% in cost savings alone, more than any other HR outsourcing option! Let’s look at some ways PEOs increase ROI.
Benefits of a PEO That Save You Money
So, what are the specific benefits of a PEO that directly or indirectly save you money? Here are some of the things a PEO can do to support your business and help you save money.
1.) Attract Top Talent: The current environment tends to favor employees and candidates. You need to offer high-quality benefits to stand out, which a PEO can give you access to at an affordable rate. You also need to have a solid workplace culture supported by freeing HR's time to focus on it.
2.) Improve the Workplace Environment: With HR, you can focus on giving employees what they need and want, mediating conflicts, and building your values into your culture, and your employees will experience an improved environment. This means they are less likely to quit, reducing the high turnover costs.
3.) Relieve Administrative Burdens: By taking on most or all of the routine administrative tasks, PEOs free your leadership to focus on growing the company. This is particularly important for small companies, where HR tasks may be taken on by an owner who fills in where they need to, or the office manager may find themselves doing payroll instead of running the office.
4.) Optimize Business Functions: A PEO has a wealth of knowledge that can help a small or mid-sized company or startup design business processes and procedures that work well out of the gate. Employees become more productive, and even more of your leadership time is freed up.
5.) Increase Health and Wellbeing: In addition to better health insurance (which means employees are more likely to get preventive care), PEOs can help you design a healthy culture with a wellness program that helps keep your employees mentally and physically healthy. Wellness programs also increase productivity and reduce absenteeism, injuries, and health-related costs.
A PEO can help you with all of these things, improving everyone's productivity and how the business is run. However, it also gives direct cost savings.
The Cost Savings of a PEO
More than any other HR outsourcing method, a PEO can directly save you both time and money. Here's how a PEO can lower your costs and thus increase your profit.
6.) HR Team Costs: Outsourcing means you don't have to hire full-time HR professionals. They can also provide you with high-quality enterprise-level HR software that saves you and your staff a lot of time and, thus, money.7.) Health Benefit Savings: PEOs can provide health benefits at a lower cost. This perk helps you afford high-level health benefits at small business costs. In addition to saving money, this can help attract and retain talent. In today's competitive environment, you can't afford substandard health benefits.
8.) Workers' Compensation Savings: When you work with a PEO, your workers' comp premiums are calculated off of their experience rate modifier. This is generally better than the rate you can get on your own. Also, the PEO can provide you with assistance with risk management, safety training, and return-to-work programs that reduce the cost of claims and thus also lower your premiums.
9.) Other HR Expenses: A PEO can also save you time and money on additional costs. For example, the PEO can take over managing unemployment claims, which can be very time-consuming and can be costly if done wrong. The PEO will also take over payroll management, which is extremely time-consuming and tedious, and benefits administration. This reduces the number of hours spent on HR, allowing you to free up time to run your business.
Improve Your ROI with PRO Resources
Overall, hiring a PEO is like hiring an HR department but for less money, and you and your team gain valuable time. Partnering with a PEO can help improve business operations, reduce HR administration tasks, increase productivity, and boost your overall ROI.
At PRO Resources, we customize plans that work for you and your team with your bottom line in mind.