HR may be a two-letter department, but their responsibilities touch almost every aspect of your business. Yet, not every budget has room for a full-fledged HR team. If you’re considering hiring an HR administrator, consider all of your options first. A PEO could be the solution you’ve been looking for.
Not sure what a PEO is? Check out our guide on all things PEO.
The true cost of HR
Before you can decide on a solution, you first need to understand what HR needs your business really has. Take stock of any current HR-related expenses like:- Pre-employment screening services
- Workers' compensation carriers
- Risk management consultants
- Employee benefit brokers
- Insurance carriers (dental, vision, life, disability)
- Retirement plan administrators
- Payroll services
- Time and attendance systems
Then, consider other indirect ways you’re paying for HR. How much time are you spending on HR tasks? Are you dealing with any fines because of misunderstood employer regulations? What about the cost of high employee turnover?
Finally, ask yourself, how much of this can a HR administrator take on and how much would you still need to outsource? Understanding the true cost of HR involves looking at direct expenses, opportunity costs, and the value of a well-managed workforce.
HR administrator vs. PEO: the showdown
Hiring an HR administrator might seem like the obvious choice, but let's break it down. A PEO can provide all the same services as an HR administrator and more. HR encompasses so many things that it would be impossible for one person to be an expert in them all. That’s why PEOs employ teams of specialists. Working with a PEO is like having a Fortune 500 HR department for a fraction of the cost.
HR administrator |
PEO |
| One person | Team of HR specialists |
| $50K-80K average salary + benefits | Based on industry risk (typically less) |
| HR admin work | HR admin work |
| Benefits administration | Benefits administration |
| Workers’ comp | Workers’ comp |
| Limited compliance expertise | State-to-state compliance expertise |
| (Maybe) payroll | Payroll |
| (Maybe) Employee wellness programs | Extensive employee wellness programs |
| X | Safety and risk management |
| X | Included HR technology |
| X | Reduced employer liability |
| X | Collective buying power |
The best of both worlds
So, should you hire an HR administrator or a PEO? Well, truthfully, it could be both (I know, not the answer you were expecting). Some businesses work exclusively with PEOs, while others retain a few HR staff and augment with PEO services. The right answer is what makes the most sense for your business. (Except for putting the entire burden of HR on one person).
If you’re looking to expand your current HR team, then partnering with a PEO is a great option. You get the benefit of having someone who knows your business and the expertise of a larger HR team.
Ready to go? That is the question
The true cost of HR extends far beyond salaries and software subscriptions. It encompasses time, risk, culture, and long-term business success. Whether you choose to hire an HR administrator, partner with a PEO, or adopt a hybrid approach, the key is to consider your unique business needs.
If a PEO sounds like the way to go, let’s talk. PRO Resources has been at this for 30+ years and works with small and midsize businesses across industries. Learn more about what we do and reach out when you're ready. We’ll be waiting.