HR is a critical foundation for companies that kicks in as soon as your company is founded – regardless of whether you have a formal HR department or handle tasks as an owner. But while it’s easy to see HR as a cost-sink, by no means does that have to be the case.
When handled efficiently, HR can increase profitability by helping you reduce costs while also inspiring employees to be more engaged and productive - which can further increase profits. Outsourcing HR to PEO partners is one of the simplest and most cost-effective ways to streamline HR functions. Partnering with a PEO can also yield impressive returns and benefits to your company, bringing up to a 27.2% ROI from their services.
In this blog post, we'll explore how PEOs contribute to this remarkable ROI and provide insights into how they can be indispensable partners for business owners and HR professionals.
How PEOs Support Your Company
PEOs manage critical but mundane HR tasks, such as payroll and benefits, that can take up valuable time and resources without directly contributing to business growth. Outsourcing these tasks can free up internal resources to focus on strategic initiatives that drive growth.
They also provide access to more cost-effective employee benefits, such as healthcare and retirement plans. By pooling employees from multiple organizations, PEOs have the leverage to negotiate better rates and terms with insurance providers, enabling businesses to offer competitive benefits packages at a fraction of the cost.
The time and cost savings these provide can be redirected to your company, either as increased focus on your staff or redirected funds. Whether it's funding new product development, enhancing customer service, or expanding marketing efforts, the resources saved allow companies to strengthen their foundation for growth.
Understanding the ROI of PEOs
PEO partnerships provide a crucial foundation for your company. It allows you to grow quickly while giving you confidence that your HR is in good hands.
Let’s look at some of the ways PEOs can achieve such high ROI returns.
1. Cost-Effective Compliance Management
Navigating the complex landscape of legal and regulatory compliance can be a daunting task for any organization. PEOs are well-versed in employment laws, tax filings, and other compliance-related matters, ensuring that businesses remain on the right side of regulations. By minimizing the risk of costly fines and lawsuits, PEOs save companies substantial financial resources that can be redirected toward growth and innovation.
2. Access to Better Benefits
A critical factor in employee satisfaction and retention is the quality of benefits offered. PEOs enable businesses to access better health insurance and retirement plan rates by leveraging collective bargaining power. This enhances employee satisfaction and reduces turnover, resulting in a more stable and productive workforce.
3. Focus on Core Business Functions
With the administrative burden of HR tasks offloaded to PEOs, companies can concentrate on their core competencies. This renewed focus on strategic areas such as product development and customer service leads to improved growth and profitability. By allowing internal teams to prioritize value-driven activities, businesses can achieve a higher return on investment.
4. Expert HR Support and Guidance
PEOs provide expert human resource services, including recruitment, employee training, and performance management. These services ensure a more productive workforce by attracting top talent, fostering skill development, and maintaining high levels of employee engagement. When employees feel engaged and supported, they are more productive and are also more likely to stay at the company.
5. Scalability for Sustained Growth
Businesses often face challenges related to scalability as they grow. PEOs offer scalable HR solutions that can adjust to the changing size and needs of an organization. Whether it's expanding operations or downsizing, PEOs provide the flexibility and infrastructure needed to accommodate growth seamlessly. This adaptability ensures that businesses can pursue growth opportunities without being hindered by operational constraints.
6. Reduction in Overhead
By consolidating various HR tasks into a single comprehensive service, businesses can reduce overhead costs associated with managing these functions in-house. PEOs have established systems and processes in place, helping your existing staff manage high workloads by off-setting essential and recurring tasks. This reduction in overhead contributes to cost savings and enhances overall operational efficiency.
7. Enhanced Employee Morale
Access to robust HR support and improved employee benefits positively impact workforce morale and productivity. Employees feel more valued when they have access to comprehensive benefits and a supportive HR environment. This leads to increased job satisfaction, higher motivation levels, and, ultimately, improved organizational performance.
Work with a PEO Partner like America’s Back Office!
When considering a PEO partner, it's essential to choose one that aligns with your company's values and goals. America's Back Office stands out as a Certified Professional Employer Organization (CPEO), providing all the base services of a PEO with an added level of credibility and assurance that comes from IRS certification. With decades of experience, America's Back Office has a proven track record of supporting businesses in transforming their HR functions.
By partnering with America's Back Office, you gain access to a team of experts who understand the unique challenges faced by businesses. Their comprehensive suite of services, ranging from HR support and compliance management to benefits administration and payroll processing, ensures that your company receives the full spectrum of PEO benefits.
Reach out to America's Back Office today to discover how they can help your organization thrive.
