When it comes to your small business, it’s all about growth, innovation, and protecting your assets. And when it comes to those assets, the most valuable of all is your people.
Chances are, HR management and its complexities are not your forte. And that’s okay. But getting back to those assets: how do you ensure that you’re doing it all right when it comes to employment tasks, responsibilities and related costs?
For an increasing number of companies, the solution lies in outsourcing some or all of their HR functions. An increasing popular and successful outsourcing option is a partnership with a professional employer organization (PEO). PEOs turn human resources into a strategic initiative that not only improves profitability, but also protects the assets that generate that profitability. This value is delivered through a range of services that can all be linked to one of a company’s Four Pillars of Profitability. When your business has all four of these pillars supporting it, you can focus your attention on profit-generating activities like taking care of customers and growing your company.
Four Human Resources Functions that Businesses Should Outsource to a PEO:
1. Payroll and Payroll Tax Administration
The government imposes a staggering number of requirements on employers to ensure that they not only pay their employees correctly, but also withhold correctly and remit payroll takes in a timely manner.
- When you work with a PEO, you enter into a co-employment relationship. In addition to having your PEO prepare your payroll and handle related tax administration, your employees gain access to competitive benefit packages that may otherwise be unavailable to them.
2. Employee Benefits
Speaking of benefits,you need competitive offerings in order to attract and retain top talent. But for a business the size of yours, the cost can be out of reach.
- PEOs leverage economies of scale as they pool employees from their various client companies together to obtain better benefits and lower rates. Most PEOs offer a full suite of benefits including retirement plans, dental and vision coverage, HSAs and FSAs, voluntary options, and more.
3. Safety & Risk Management
When a PEO enrolls a client, the PEO accepts the risk associated with that client’s operations. As part of investigating and underwriting every potential exposure, PEOs help their clients develop effective safety and risk management programs.
- If a company’s risk requires rehabilitation, a PEO will develop a “carve out” option, which remains in effect until that rehab is complete. The goal is to work with a client to mitigate risk through proactive safety engineering, so the client can soon benefit from being part of a PEO’s robust, cost-effective master policy.
4. HR Compliance
A PEO’s comprehensive understanding of the complex legal responsibilities of being an employer is a compelling reason to outsource HR compliance management.
- Companies that partner with PEOs gain an extra layer of insulation from liability through the co-employer relationship. A PEO can extend its Employment Practices Liability Insurance (EPLI) coverage to its clients, saving them the cost of maintaining their own separate policy.
Looking for solutions?
At Lyons, we are HR. Lyons HR functions as an off-site HR department for your small to mid-sized business. We can manage your human resources from sourcing and recruitment to retirement, and every touch point in between – allowing you to focus on what you do best: running your business. Contact us today to learn more.