To keep your growing company profitable, you need a robust, affordable HR strategy to ensure you can attract and retain the best and brightest talent. It has to be competitive – and yet, affordable. How do you strike this critical balance?
What Are The Four Pillars of Profitability?
We Are HR, asserts that “business owners are tax collectors.” It sounds a bit imposing, but it’s spot on. Governments continue to impose myriad tax requirements on small businesses, ensuring that you not only pay employee taxes correctly, but also withhold correctly and remit these taxes in a timely manner. In addition, you need to:
- maintain time and attendance systems.
- prepare tax returns.
- process W2 forms and a mountain of other paperwork
and the administrative list goes on. For a growing number of companies, the smartest way to be sure all the bases are covered is to partner with a professional employer organization, or PEO.
Pillar 2: Employee Benefits
When you work with a PEO, you enter into a co-employment relationship that gives your staff access to a full range of benefit options that may otherwise be out of your price range as a small company. Your PEO leverages its group purchasing power as it pools employees from various clients together. This opens the door to Fortune 500 level benefits for your employees, including health and flexible savings accounts; 401(k) plans; health, dental and life insurance; dependent care, voluntary benefit options, retirement plans,and more.
- Often, the cost of administering a benefits plan can exceed the cost of the plan itself. Especially since the passage of the Affordable Care Act, small business owners have experienced stifling healthcare premium increases, which have continued even since the 2019 repeal of the act’s individual mandate. Partnering with a PEO can relieve you of this and many other benefit admin headaches.
Pillar 3: Safety and Risk Management
Many small businesses have a certain level of risk “baked right into their business models.” They may be heavy equipment, vehicles, machinery or other factors that can potentially threaten the safety of your workplace environment. How watertight is your risk management program?
- When a PEO enrolls a new client, it accepts the risk associated with that client’s operations. It helps you develop an effective safety program and works with you to rehabilitate and mitigate risk.
- PEOs typically have a master policy, reserved for clients whose profile doesn’t pose a disproportionately high risk. If a company needs rehab to be eligible for this plan, the PEO will help them get there. This policy is deeply discounted because the PEO is either self-funded or has accepted a high retention level.
Pillar 4: HR Compliance
Compliance is a sometimes overlooked area of HR management, yet it is critically important and demands ongoing maintenance and monitoring. Your PEO relationship provides an extra layer of protection from potentially devastating liability.
- Your PEO can extend its Employment Practices Liability Insurance (EPLI) to your company, saving you the cost of your own policy. The specific details are defined in your Client Service Agreement.
How Do The 4 Pillars of Profitability Impact Your Business?
By partnering with Lyons HR, you can achieve your goals of lowering employment costs, keeping your benefits competitive, mitigating risk and staying compliant, while continuing to take the lead in securing top talent. We’d love to help you return to what you love and doing what you set out to do in the first place! If you’re looking for ways to better manage your business, we can help! Contact us today to learn more.