Let’s face it, size matters. When it comes to small and mid-sized businesses, because your organization is smaller, you often pay a larger per-individual rate on plans, benefits packages, and technology licenses. Keeping costs down, maintaining reliable cash flow, and giving your employees the benefits, they need are all competing objectives. Working with a Professional Employer Organization (PEO) can help you manage all three by:
- Supporting your HR and administrative operations
- Giving you access to more negotiating power and cost savings
- Helping you keep your organization compliant
Take a closer look at how PEO services can make your company more resilient and give you access to financial benefits.
Cost Savings Through PEO Services
When your company is looking for strategies to increase financial stability and security, it's not increased revenue that can yield the most immediate and efficient return on investment. Instead, evaluating your company's current spending and implementing cost savings strategies can immediately increase your cash flow and reduce anxiety about future operations. One of the primary advantages PEO services provide is the direct cost savings your organization can realize through more efficient administrative processes, a lower risk of sudden fees and penalties for noncompliance, and even less company turnover. Consider these three ways you can save on expenses.
Cost Savings Through Economies of Scale
When small businesses negotiate with large insurance and retirement benefits provided, the costs are often inefficient. Your company pays for individual program fees, and you may not have much negotiating power or access to reduced rates for larger groups. But when you work within a PEO, you join a network of other companies. Your PEO can negotiate rates based on that larger block of business and give you access to more robust programs. Ultimately, you can reduce your HR, payroll, and benefits costs while getting higher-quality services.
Risk Mitigation and Compliance Management
Fines and penalties for failing to meet compliance requirements can put your business at financial risk. But many small businesses simply don't have the staff, time, and expertise to stay on top of the federal, state, and local regulations that apply to them. PEOs specialize in compliance with payroll, ever-changing laws, and employment regulations. You can proactively maintain compliance, which reduces the risk of fees and keeps your processes more standardized.
Staying compliant is one form of risk mitigation, but PEO services can help with additional financial benefits, too. Your organization can ensure you maintain the right types of insurance based on your location, industry, and company size. They can also make sure you have the right protections in place for potential workplace accidents, legal claims, and other liabilities.
Streamlined Administrative Processes
Every business has some degree of administration, IT, and support costs that are outside the fundamental services and labor a company provides. When you have third-party organizations take on those business aspects, such as HR, payroll, and onboarding, you can focus on the core aspects of your business. You and your employees can spend your working hours where they provide the most value.
Enhanced Employee Productivity and Satisfaction
Both prospective and current employees care about more than just their pay rate. They often require access to health insurance, retirement plans, and supplemental benefits as part of their total employment package. The more robust a package you can offer your team, the more appealing your company is as an employer. PEOs help you access better training resources, Employee Assistance Programs (EAPs), benefits, safety, and wellness programs along with other perks.
Access to Advanced HR Technology
Through a PEO, you can also gain access to enterprise-level software solutions that have smoother integrations and better functionality. Switching from spreadsheets, legacy programs, or manual processes— to cutting-edge portals gives you more insight and control over your organization. It saves everyone time and creates a better employee experience. By adding automation and advanced portals to your business processes, you can streamline tasks, do work faster, and reduce employee burnout and stress.
Flexibility in Workforce Management
As an employer, you can increase or decrease your team size more easily with PEO services. You can request and add more staff when you need it, with more streamlined onboarding than with manual in-house processes, and then you can downsize as needed to save on costs and avoid the inefficiencies of an underutilized staff.
Streamline Your Operational Costs with a PEO
Small and mid-sized businesses face substantial challenges when trying to compete with larger businesses or reach new markets. Maintain or improve your operations with PEO services. When you streamline your operational costs without negatively impacting employee experiences, you create a healthier organization. The cost-effective solutions a PEO can provide include outsourced compliance and payroll management, access to more benefits programs, and support with all your HR functions. Unlock the power of these financial benefits by examining your businesses current costs related to HR—including both direct costs and the in-house time spent outside of your core competencies. Start exploring the advantages of our PEO and create a plan for 2024!
