- October 13, 2021
- HR Services, Latest News, Staff Leasing (EOR)
Main Benefits of a Professional Employment Organization
Тhe partnership of a professional employer organization
Some businesses especially the small ones, and HR professionals, have less resources to manage all of their accountabilitis. The responsibilities of a HR professional can vary from recruiting and hiring, administrative tasks such as payroll, performance matters and reviewing benefits costs and other administrative issues in order to support their organization.
However, with the partnership of a professional employer organization (PEO), companies can delegate their HR tasks to a specific service. Additionally, they are able to re-organize their workflow and support their business developmet. In this article, we talk about what a PEO is and present you a list of strong benefits that they a PEO gives.
Definition of a PEO
A professional employer organization is a solution that helps companies and businesses manage parts of their HR tasks, including payroll, benefits, employees’ compensation and more. This can allow companies to outsource their HR functions to a PEO and focus on their business objectives. When a company partners with a PEO for their services, the PEO often becomes a co-employer of the company’s workforce. The company still has complete control of hiring and termination.
Here are some of the main PEO advantages you can gain through this model:
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Save time and money
One of the greatest PEO advantages is the capacity to delegate non-profit generating activities to a trusted third party. A reputable PEO can handle important but time-consuming tasks such as a compliant payroll process, tax reporting and filing, and other administrative tasks.
This allows you to save time so that you and your core team can focus on more important work accontabilities that influence your business, such as profit, productivity and company development.
Moreover, PEOs with good reputation are established organizations that operate with best practices. You can often save time as well as money by having a PEO partner instead of in-house experts to tackle your HR tasks.
A PEO solution can reduce the cost to administrate your payroll and other accounting costs. Actually, this is one of the best PEO benefits.
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Assistance with legal expertise
Many PEOs can also offer companies assistance with unquestionable employment challenges, including payroll issues and laws concering paid time-off. If you’re not sure about a case’s regulations, PEOs can sometimes offer HR experts to help answer questions and minimize risks. For instance, when hiring remote workers, it’s possible that certain time-off policies in one country may differ from the country your business is currently in. A PEO can support you better manage those questions and situations. They can offer consultation when making serious desicions.
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Provide HR support
Partnering with a PEO is much like gaining access to a thorough HR division, with a team of HR professionals. These experts are up-to-date with new and changing employment regulations.
According to a report conducted by the National Association of Professional Employer Organizations (NAPEO), PEOs offer access to more HR services at a cost that is close to $450 lower per employee, compared to companies that manage their HR functions in-house.
Researches show that businesses partnering with a PEO grow 7-9%faster, have 10-14% lower turnover, and are 50% less likely to go out of business.
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Handle the payroll-related operations
Professional employer organizations hadle all business’s payroll-related job. PEOs administer payments to full-time and part-time employees (salaried and hourly), and contractors as well. Briefly, they manage payroll administration.
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Administrate the laying off process
Companies that had previously terminated employees for different reasons find they need to hire employees back. This comes with hude amount of paperwork and asked questions from employees’ side.
When businesses do need to leave of absence or terminate employees, the PEO dilivers compliance.
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Understand the legislation and compliance
There can sometimes be a lot of laws and regulations involved with HR duties and employment processes. Professional organization employers often understand these regulations and stay up to date on any changes that are made. This can allow companies to easily follow and comply with major human resource rules and develop their company more smoothly and efficiently.
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Ease the risk protection
Your company can be protected from risks, because you are working with PEO professionals. You can avoid making expensive payroll mistakes. You can also guarantee that you avoid fines from lack of compliance. PEOs are experts on compliance matters related to employment.
Additionally, because the PEO is the employer of record, it takes on all employer-related legal duties. PEO professionals will help you mitigate risk so you can concentrate on the progress of your business growth.
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Opportunity to negotiate better benefits
Since PEOs represent a wide network of companies, they can negotiate better benefits packages and lower insurance costs than some small businesses.
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Reach better talent pool
Some PEOs also offer supplemental employment services, such as recruiting.
Their recruitment consultants know where to find the best fits for different industries and also have a diverse and reach network of talents. This allows you to find professionals to add to your team faster and more cost-effective than trying to manage this area of your own.
Some PEOs can also extend the candidate search through influential networking channels and job boards.
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Support the company development
Small businesses that outsource their HR duties to a PEO can often focus their resources on other tasks, such as their company missions, productivity and sales. They are able to concentrate on company growth. Because of this, companies can also grow more quickly by focusing on more challenging needs and tasks.
Horizons Bulgaria supports companies with tailored PEO solutions. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us now!
Photo credit: Freepik
Cited sources:
- https://nhglobalpartners.com/
- https://www.worldinsurance.com/
- https://www.indeed.com/