Many businesses, both large and small, have considered engaging a PEO. The thing is, the term itself feels vague to people who don't really know much about it—what is a PEO? What do they do? How can they benefit a company and its employees? These are all good questions and ones we aim to answer. Let's find out more about the purpose of a PEO arrangement.
Simplify Necessary Processes
Some things in business are unavoidable; there will be never be a company that doesn't have to worry about worker classification compliance, for example. Very few businesses can get away with filing payroll improperly or having lax processes for human resources. That's why so many businesses have begun turning to PEOs. In essence, PEOs (or professional employer organizations) are organizations that specialize in managing things like payroll, human resources, and taxes on behalf of other companies. Businesses have begun outsourcing these various processes to professionals, with a great deal of success.
For some, they find the convenience of being able to stop worrying about conducting payroll on their own, which is a great boon to their overall operations. For others, they simply don't have the resources to manage complicated administrative activities in-house, and when they outsource it, they get the benefit of a whole team's worth of skill and expertise. Many growing businesses (or businesses looking to expand) make use of a PEO arrangement in order to help them move into new areas of business, while avoiding many of the obstacles that come with it (like business registration, insurance and banking infrastructure, and so on).
A PEO arrangement is a great way for a business, regardless of its size or stature, to make sure that their necessities are taken care of without the worry or hassle.
Focus On Your Core Operations
Payroll and human resources on their own are inherently complicated—the amount of time, energy, and money that goes into them is staggering and can often be one of the largest non-core business expenses (for some, it's even larger than core expenses). It's for that reason that PEOs have become increasingly popular. Companies are beginning to recognize the benefits of outsourcing peripheral tasks, especially those that are so resource-intensive, and find that it leaves them with more time to focus on the most important things, like sales, marketing, and others.
For example, if you're in the business of selling a product and trying to grow your brand, the last thing you want to do is spend half your time and money processing things that don't help to further that goal. You want to be able to push the most important aspects of your business, but you don't want to sacrifice the quality of your payroll—after all, mistakes in payroll can lead to hefty fines and even open you up to lawsuits. It's for these reasons (and more) that businesses are turning to PEOs and engaging in PEO arrangements. For a flat fee, agreed upon in advance, you can have your payroll and human resources taken care of off-site. Your business still has final say and oversight on all things, meaning you don't lose any control, but you do gain a great deal of time. By being able to allocate your resources in a more effective way, you can start concentrating on the things that are most important to you and your bottom line.