4 Ways a PEO Can Help Scale Your Small Business
Navigating HR Made Simple: SMBs face challenges with recruiting, talent development, and legal compliance, but efficient HR systems are crucial for growth. PEOs offer a streamlined solution for superior HR management.
Unlock Big Benefits for Small Biz: PEOs provide small businesses access to superior employee benefits, such as health insurance, helping them attract and retain top talent despite limited internal resources.
Scaling Up with Compliance Confidence: PEOs support compliance with labor laws, enabling businesses to safely expand into new markets and tap into a broader talent pool while minimizing risks.
Today’s small to medium-sized businesses (SMB) find themselves navigating recruiting, the development and retention of talent, offering competitive benefits and compensation, and keeping up with constantly changing labor laws.
What may have once been easy to handle manually or with a good spreadsheet might not be cutting it anymore. To continue growing the business, SMBs should consider how to make their HR systems and approaches more efficient, compliant and supportive of their strategic goals.
One solution is using an HR outsourcing service, specifically a Professional Employer Organization (PEO). PEOs can handle payroll, compliance, benefits, onboarding, employee queries and more. By streamlining processes and handling everyday HR tasks, PEOs enable you to focus your efforts and time on the business.
What is a Professional Employer Organization (PEO)
A Professional Employer Organization (PEO) is a company that provides comprehensive HR services to small and mid-sized businesses. By entering into a co-employment arrangement, the PEO handles various administrative tasks, including payroll, employee benefits, tax administration, and compliance with labor laws.
PEOs are particularly valuable for small businesses that lack the internal resources to handle complex HR tasks. They offer access to benefits typically reserved for larger corporations, such as competitive health insurance packages, which helps smaller companies attract and retain talent more effectively.
Who uses PEOs?
PEOs are widely used by businesses of various sizes, but they are particularly beneficial for small to mid-sized companies that want to reduce the burden of HR management. For example:
- Small businesses with 10-50 employees might use a PEO to streamline payroll processing, employee benefits, and legal compliance, giving owners more time to focus on growing the business.
- Mid-sized businesses with 50-200 employees can leverage a PEO to access cost-effective benefits plans, ensuring they remain competitive with larger organizations when attracting top talent.
- Startups often use PEOs to ensure compliance with complex employment regulations from the beginning, minimizing risk while scaling rapidly.
Benefits of a PEO for Small Business
Here are some real-life examples of how SMBs have used PEOs to scale their growth.
Long-term business growth
One advantage of partnering with a PEO is the built-in compliance and knowledge of regulations and laws no matter the geography. This means small businesses can expand to more locations and expand to a wider talent pool.
With this, a PEO can provide streamlined and secure recruitment technology and onboarding, helping you through an otherwise time-consuming process. When the hiring and onboarding process is positive and easy, it starts off the employee relationship on a good footing.
Being a HR “one-man-band” means there’s a lot to do and not enough time to do it. This was the case for one of our clients, 360 Wraps, a family-owned vehicle-wrap company in Texas. With growing the business a priority, the company wanted to streamline the manual processes involved in managing payroll, benefits administration, taxes and talent management.
With the help of a PEO, they were able to streamline their HR processes and gain HR support, shifting focus from manual tasks to strategic planning and long-term business growth. The team now has the capacity to concentrate on core business activities instead of HR-related issues.
“Ultimately my passion is making sure that my family and kids have a legacy and that my employees are building their own legacies, too,” said the company’s shared chief operating officer Felecia Dunn. “Using [a PEO] has freed up my time and provided the resources to help me focus on accomplishing that goal.”
Benefits and expert support
In a tight labor market, smaller businesses often experience a disadvantage when competing with larger organizations that can offer strong benefits and compensation.
However, a PEO can help level the playing field by providing a wide range of valuable and secure benefits options to help retain current employees and competitively recruit new talent. Employees can often enroll online using self-service technology. More benefits, better pricing and easy access can help SMBs stand out.
One of our clients operates a Kentucky-based plastic surgery center as well as a rejuvenation center that offers day spa services and wellness therapies. With 70 employees across both businesses, the organization is growing.
Given their varied operations and multiple locations, this client was previously managing three separate payrolls and employee benefits.
“There were a lot of opportunities for us to streamline our payroll processes and obtain more accurate reporting,” said Nickoli Neville, Chief Operating Officer at CaloAesthetics Plastic Survey Center and CaloSpa Rejuvenation Center.
Working with the PEO’s dedicated HR business partner, the company now has access to designated experts for support around benefits, payroll or HR support. They are also able to offer their employees best-in-class benefits.
“As an independent business, we now have access to abroad spectrum of Fortune-500 benefits that our employees can choose from, customized based on their individual circumstances,” added Neville.
People development
Another client, the president of a welding, safety and industrial supply company with over 100 employees in nine locations, wanted to support the company’s growth with leadership development and employee training.
The PEO provided guidance and training which enabled the leadership team to narrow its focus and get where they wanted to be quickly. This has also expanded the vision of what training can do company wide.
“Our PEO helped me develop a team I can trust; a team that’s aligned to where we want to go and how we’re going to get there. Partnering with a PEO has made us a more focused and driven company. The training they provide is amazing and they can help you build your future leaders,” he explained.
Since 2000, the company has made 12 acquisitions, each with its own set of challenges associated with compliance, safety or record keeping. However, partnering with the PEO, they can integrate employees much faster because they know what training is needed for each position and can make sure that it happens.
Employee experience
Partnering with a PEO also enables small businesses to provide best-in-class processes and employee support. PEOs can help you create policies that are both compliant and customized to your company culture, providing consistency across locations as you scale the business.
Employees can get quick answers to their questions by trained professionals, not chatbots. Employee self-service via mobile app means workers can access pay information, submit PTO and manage their benefits quickly and without a call to HR.
When you or your HR staff are no longer bogged down in day-to-day compliance, payroll and benefits, you have more time to focus on the strategic programs that will expand your business and serve your customers.
PEOs partner every day with small businesses to help them define and execute the right HR strategy as they look to scale and grow. They lift the most onerous and time-intensive tasks off the company’s HR function, support compliance, provide a better employee experience and make small companies more competitive in attracting and retaining good employees.
What's Next?
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