While employees may be essential to running your business, PEO services can make the work of hiring, managing, and retaining them significantly easier.
Most business owners are experts on their products or services, but nobody can be an expert at everything — and handling complicated HR processes successfully often requires considerable time and specialist knowledge.
Working with a professional employer organization (PEO) is like having your own highly qualified HR department dedicated to helping you manage people-related issues so that you can focus on running the business. Even many business owners who work with these organizations don't realize the depth of services available. PEO service providers can partner with you to offer much more than just payroll services or recruiting.
Winning the talent war
With the Bureau of Labor Statistics reporting unemployment at just 3.9 percent in November 2023, businesses across the country are feeling the competition for top employees. Sometimes, the most talented or in-demand workers head to larger employers, assuming these organizations can offer more lucrative employment packages or simply because they are unaware of the opportunities available at smaller businesses. However, some PEO services can provide expert recruiting, tapping into a vast network of job seekers to help source talented individuals who will be an ideal fit for your business.
Retaining current employees
Likewise, with the talent war raging, business owners must also be aware that the current employees they value could be recruited by competitors or other industries. A PEO can create and offer employee perks and benefits packages that rival those of larger companies and meet the needs of your existing employees, helping build loyalty and engagement to avoid turnover.
"PEO clients benefit from a variety of employee benefits solutions to attract and retain talent while mitigating certain employment-related risk through the shared responsibility arrangement," says Kristen Appleman, Senior Vice President and General Manager of ADP TotalSource.
Helping protect your business
PEO service providers have HR experts dedicated to your success, providing guidance and advice on HR, compliance, benefit strategy, employee development, compensation, turnover, engagement, hiring, culture, and more. You get experts in your corner to answer day-to-day questions, but also to provide counsel whenever unexpected or tricky situations arise. They can help protect your interests by ensuring compliance with employment rules, safety regulations, and proper handling of difficult employee situations so you are shielded from mishandling and potential lawsuits.
In a regulatory landscape that changes frequently, a PEO can help you meet your compliance obligations or help you comply with employer rules and regulations. For instance, PEO professionals are experts at unemployment benefits, payroll taxes, workers' compensation insurance and claims, and other regulatory matters, so you do not have to be.
"A major reason to choose a PEO over HR outsourcing or some other type of HR solution," says Appleman, "is the advantages the co-employment model affords a business. Having a single partner that will provide day-to-day administrative relief, future-focused strategic guidance and solutions addressing all aspects of the employee life cycle from hire to retire can help optimize your business processes and increase profitability."
If you are looking for a PEO partner, make sure to be thorough in weighing and forecasting your needs so that you can choose the PEO service provider that will truly give you the time and energy to focus on what matters most to your business.
Get the guide
Our PEO Buyer's Guide outlines more about how a PEO can help make it simpler and more cost-effective to grow your business. It includes a checklist for identifying your needs and FAQs that can help prepare you for conversations with potential PEO partners.
Download: Choosing the right PEO for your business