In-House HR vs. Outsourcing HR: Why a PEO is the Best Option for Your ROI

In-House HR vs. Outsourcing HR: Why a PEO is the Best Option for Your ROI

As a business owner, you’ve probably asked yourself whether in-house HR is more cost-effective than outsourced HR. Well, the answer to this question lies in the respective ROI of both arrangements. The fact is a human resources team is quite costly. When you consider salaries, benefits, and bonuses, hiring a team and retaining them for years to come is a considerable expense. However, HR is a necessary function of any business!

By comparison, outsourced HR bodes well for your company's efficiency and operating costs. Outsourced HR also frees up time to focus on other vital tasks besides routine onboarding, payroll, insurance claims, and benefits administration. So, go ahead and procure the services of a PEO for your HR outsourcing needs!

Learn More about the Benefits of a PEO

PEO vs. In-House HR Team

Did you know PRO Resources offers HR solutions for small to mid-sized businesses? PEOs provide a broad range of services and great value for your money.

Here are some of the benefits of outsourcing HR:

1.) Cost

Being a business owner, your priority is to minimize operating costs without affecting efficiency. Outsourcing HR to a PEO allows you to achieve just that. It is worth noting that PEOs cost much less than an in-house HR team.

It’s important to know that the ROI of a PEO is greater than an in-house HR team. Procuring the services of a PEO allows businesses to minimize operating costs by roughly 20% to 30%. Moreover, the ROI of a PEO is approximately 27.3%.

The relatively higher costs of hiring an in-house HR team are attributable to the salaries and benefits of HR team members. Such costs are particularly high for smaller businesses that need human resource management. Notably, companies that outsource HR have a lower chance of going bankrupt, grow 7-9% faster, and have 10-14% lower turnover, according to a NAPEO industry study.

2.) Time

HR administration is a time-consuming and labor-intensive exercise. A PEO arrangement is beneficial to your business because it frees up the time an in-house HR team would take to carry out administrative functions. Some HR functions that are time-consuming may include payroll management, hiring, recruitment, handling disputes, and employee claims.

You already have a lot on your plate. Moreover, focusing on HR paperwork can make you neglect other duties and responsibilities. Outsourcing human resource management solves this problem, paving the way for your company's long-term growth.

3.) Expertise

PEOs offer unmatched expertise in human resource management. Many business owners are forced to take on HR tasks themselves and might not have the requisite expertise to execute complex HR functions.

It is worth noting that professional PEOs also abide by HR regulations. The regulations allow your business to minimize negative employee experiences, sexual harassment cases, fines, and OSHA violations.

PEO abilities and knowledge include the following:

  • Benefits Administration
  • Recruitment and Onboarding
  • Payroll Administration
  • Family and Medical Leave Act Administration
  • Unemployment Administration
  • Workers' Compensation Administration
  • Compliance Assistance
  • Drug Testing Programs
  • Wellness
  • And More

Who Should Outsource HR?

Have you wondered whether a PEO arrangement is right for you? Outsourcing HR functions remains ideal for small and mid-sized businesses who need extra help with payroll, onboarding, training, safety, and more.

A PEO arrangement enables you to concentrate on running your business and tending to important matters. They handle all HR-related responsibilities for you, so you can focus on growing your business.

A PEO with Your Bottom Line in Mind

The benefits of outsourcing HR are second to none. Outsourcing HR allows you to minimize operating costs and achieve greater efficiency.

Even if you have an in-house HR team already, a PEO can help your internal team. Namely, employee-related incentives, like The Great Resignation, or other issues concerned business owners must handle. With a PEO, your HR team will be able to focus on other objectives that make your company better, like improving culture and morale.

A PEO arrangement improves your ROI while also increasing morale, reducing turnover, and maximizing the efficiency of your company. A PEO partnership frees up your time, allowing you to focus on other tasks and responsibilities.

Don't take our word for it. Here is what CEO Sally Jacobson had to say about outsourcing HR for the Red River Zoo which has over two dozen employees—"It was a lot on me. I was responsible for all the HR, time management, payroll, safety and everything related to employment. It was a lot of extra work that I had to fit into my day. I used to think that being the CEO of a small organization just came with those responsibilities. Being able to use PRO has really helped save me a lot of time so I can focus on what I need to do and my area of expertise, business profitability and growth.

Get in touch with PRO Resources today.

Want to hear what else Sally had to say? Check out the video: Red River Zoo Case Study

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