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Can Professional Employer Organizations Increase Employee Satisfaction?

Posted by Stacey Jones

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Jul 25, 2019 11:00:00 AM

 

You may know some of the benefits of working with a professional employer organization (PEO) has for your company. For example, businesses that work with a PEO see improvements in their revenue growth, and even their longevity.

What impact do PEOs have on your employees? Some people might think working with an outside organization to deliver HR may reduce employee morale, but there’s evidence to the contrary. In fact, working with a PEO could improve employee satisfaction. Here’s how.

Professional Employer Organizations Do Payroll Right

Many employers team up with a PEO in order to deliver payroll. This is especially true of global companies that operate in multiple international markets. Payroll rules might differ vastly from country to country, and state to state. Rules are almost always in flux, which can make it difficult to keep up.

If a company is new to the market or struggling to keep up, this could mean delays in employee payments or mistakes in payroll. Working with a PEO resolves many of these issues, since they have the expertise to make sure payroll is done correctly and on time.

A PEO Can Improve HR Delivery

Professional employer organizations specialize in HR services. That goes beyond payroll, and may include services like compliance monitoring, employee development, and more.

Across all of these HR services, the PEO works to improve delivery. That could mean they expand employee development programs by offering your team access to more training opportunities, or it could simply mean that HR’s response time decreases.

Across the board, though, PEOs can help employers improve HR delivery, especially for their international employees.

PEOs Reduce Turnover

More clear evidence that PEOs improve employee satisfaction is that companies that work with a PEO see a 10 to 14 percent reduction in their turnover rate.

Turnover rates are a good indication of employee satisfaction. If employees are dissatisfied, they’re more likely to leave the company. The more satisfied an employee, the longer they’ll stick around, often because they have a positive experience when coming to work.

How do PEOs decrease turnover rates? There are a few ways. First, working with the PEO improves compliance. Their advice may help you find employees who are truly a great fit for your company. They might also make recommendations about benefits packages or policies that can make a workplace more attractive to employees.

They can improve communication with employees as well. They’re able to deal with HR issues in a timely manner, which improves employee satisfaction.

Finally, the PEO could offer employees more opportunity for development. Clearer policies, better support, a better compensation package, and a solid development program are all key to employee satisfaction.

Easing Cultural Differences

Another key point global business leaders must consider is culture. Whenever you enter a new international market, you should be prepared for employees to have different cultural expectations.

These expectations may be subtle, such as Canadians preferring consensus-building, while American employees prefer more top-down direction. Even these seemingly minor differences, though, may lead to culture clash and decrease employee satisfaction.

Working with a PEO can help both sides smooth over any cultural wrinkles in the relationship. The PEO might be able to bridge communication styles. Their advice could help you understand employees who live and work in another country, so you can offer them the right supports and benefits.

Is It Time to Hire a PEO?

If you’re moving into a new market, then it may be time to consider partnering with a PEO. Working with them from the start to design your employee programs, policies, and management style can help you ensure employees stay satisfied for the duration of their tenure with you.

Topics: PEO, Employee Relations, PEO Services, Canadian PEO

Stacey Jones

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