What Drives the Fear of PEO Outsourcing?
For small and mid-sized businesses, ranging from $500,000 to $100,000,000 in revenue, utilizing a Professional Employer Organization (PEO) can be a game-changer.
In one sentence:
By partnering with a PEO, employers gain access to the resources and expertise of a much larger company—including comprehensive payroll, HR support, worker safety, benefits administration, and lower workers’ comp rates—often at a cost comparable to, or even less than, their current payroll and workers’ compensation expenses alone.
The Benefits of Partnering with a PEO
1. Access to Comprehensive Resources
What It Means: Small and mid-sized businesses often lack the internal resources to manage payroll, HR, and employee benefits at the scale of larger companies.
How a PEO Helps: A PEO provides access to robust systems and experienced professionals in these areas, allowing smaller businesses to operate with the efficiency and sophistication of much larger firms.
2. Enhanced Expertise and Support
What It Means: Managing HR, compliance, and worker safety requires specialized knowledge that many small businesses may not have in-house.
How a PEO Helps: PEOs offer expert guidance and support in these critical areas, helping businesses navigate complex regulations, mitigate risks, and ensure compliance with employment laws.
3. Cost Savings and Financial Efficiency
What It Means: Payroll and workers’ compensation costs can be significant and unpredictable for small and mid-sized businesses.
How a PEO Helps: By leveraging their buying power and negotiating with insurance carriers, PEOs can secure more favorable rates for workers’ compensation and employee benefits, often resulting in cost savings that exceed the expense of their services.
4. Focus on Core Business Functions
What It Means: Business owners and managers need to concentrate on their core competencies and growth strategies rather than getting bogged down by administrative tasks.
How a PEO Helps: With a PEO handling essential administrative functions, businesses can redirect their focus towards their primary business goals and innovations, driving growth and success.
5. Risk Management and Compliance
What It Means: Business owners and managers need to concentrate on their core competencies and growth strategies rather than getting bogged down by administrative tasks.
How a PEO Helps: With a PEO handling essential administrative functions, businesses can redirect their focus towards their primary business goals and innovations, driving growth and success.
6. Improved Employee Benefits
What It Means: Offering competitive benefits is crucial for attracting and retaining top talent, but smaller businesses may struggle to provide comprehensive plans.
How a PEO Helps: PEOs offer access to large-group benefits packages, including health insurance, retirement plans, and other perks, enhancing the overall benefits offering and making the business more attractive to potential employees.
Conclusion
For small and mid-sized businesses, partnering with a PEO provides a strategic advantage by delivering the resources, expertise, and buying power of a larger organization at a cost-effective price. This partnership allows businesses to focus on their core activities and growth while leaving essential administrative and compliance tasks to experienced professionals.
At Sixth Man Employer Services, we are dedicated to helping businesses unlock the full potential of PEO services. If you’re ready to explore how a PEO can benefit your business, contact us for a consultation. Let us help you streamline operations, reduce costs, and enhance your company’s growth trajectory.