Bridge of wooden blocks A PEO canhelp prepare business owners for legal and payroll changesassociated with growth and make recommendations that will ensurecompliance over time. (Photo: Shutterstock)

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Owning and operating a small business is challenging intoday's market. And common issues that small business leaders oftenmust handle on their own are the countless HR tasks andresponsibilities that take a significant amount of time and energyto properly manage.

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The frustration and stress involved with modern HR has resultedin an increase in the use of outsourcing solutions. But one inparticular can prove to be valuable to small employers:professional employer organizations (PEO).

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Studies from the National Associated of Professional EmployerOrganizations (NAPEO) have shown:

  • Partnering with a PEO lowers employee turnover by10 percent to 14 percent
  • Companies who use a PEO save 35 percent on HRadministration costs
  • A PEO can help small businesses grow 7 percent to9 percent faster

In addition to these statistics and other NAPEO findings, thereare a few other ways a PEO can help small business owners.

1. Provide access to high-quality benefits

Recruiting and retention continue to cause headaches foremployers, but small businesses can be even more impacted bytoday's job market.

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To combat the growing competition for talent, many employers(including small businesses) are actively enhancing their benefitofferings to appear more attractive to job seekers, while alsokeeping current employees happy to boost retention.

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By working with a PEO, small business owners gain access to a wide-range of modern benefitsthat are the same quality as much larger organizations, suchas:

  • Voluntary benefits
  • Complimentary benefits
  • Retirement benefits
  • Personalized health insurance plans

Enhancing employee benefits can have numerous positive outcomesfor smaller employers, with recruiting and retention success at thetop of the list!

2. HR compliance assistance

One HR task that has grown in complexity is maintaining compliance with the numerousemployment laws that are on the books at the federal, state, andlocal levels of government.

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Since many small businesses don't have in-house HR compliancepersonnel, these tasks tend to fall on owners or other businessleaders. This can take away time from high-value businessactivities.

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But working with a PEO enables small business owners to workdirectly with HR compliance and risk management professionals whohelp to ensure their clients remain compliant with all employmentlaws.

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Not only does this free up time for business owners, but (moreimportantly) these professionals help to avoid the penalties andfines that can result from HR compliance issues.

3. Offer employee training and L&D programs

A recent HR trend has been the value employees and jobs seekersplace on learning and development programs offered byemployers.

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Given the competition in the talent market, businesses havetaken notice of the demand for L&D and are activelyimplementing programs to meet employee expectations.

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Some PEOs offer learning and development services to theirclients which can take several forms. The most common is to provideL&D programs through the PEO's HR technology, which meansemployees can take advantage of these services on-demand.

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Having a learning and development program can be a greatdifferentiator that can help smaller businesses attract and retaintalent.

4. Overcome health insurance concerns

Health insurance is a concern that's shared by employers andemployees. Health care costs continue to rise, and smalleremployers face growing challenges within the small groupmarket.

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Not only can smaller business face increased costs, but theyalso could end up paying high premiums for insurance that doesn'tmeet the needs of their workforce.

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PEOs help overcome this issue by providing small employers withaccess to healthcare options that are similar to those offered bylarge organizations, and often at a reduced cost than what theycould find on the open market.

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Additionally, some PEOs can tailor health care plans to matchthe needs of a company's employees. Considering how importanthealthcare benefits are for recruiting and retention today, this isone of the main benefits of working with a PEO.

5. Work with a strategic HR partner

Another important outcome for small businesses that work with aPEO is that they gain an HR partner that is there to help as aclient grows.

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A growing business has its own challenges, but a PEO can easethis burden. For example, if a client outgrows its current benefitofferings, the PEO can make recommendations and provide new optionsthat satisfy the needs of the business in its current state.

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Also, as a business grows, so too does its payroll and certainlegal requirements. A PEO can help prepare business owners forthese changes and make recommendations that will ensure complianceover time.

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And should business owners have questions or concerns, they caneasily contact their PEO for assistance with a variety of HR needssuch as payroll, risk management, benefits, and more.

6. Improve HR tasks with modern technology

Technology has found itself infused in just about every aspectof our day-to-day routines and activities, and HR is noexception.

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Today, even smaller employers can gain access to HR technology –often through outsourcing solutions like a PEO.

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Through technology, HR-related tasks can become much easier forsmall business owners and employees to complete. Some examplesinclude:

  • Submitting payroll
  • Requesting PTO
  • HR compliance responsibilities
  • Analytics and reporting
  • Learning and development
  • Employee onboarding

By working with a PEO, small business owners can use HRtechnology that can help simplify many HR tasks while alsoimproving the employee experience.

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Turning to an outsourcing solution, such as a PEO, can helpbusiness owners who feel overwhelmed with the many HRresponsibilities that must be managed each day. By having moretime, leaders can focus their efforts on other areas of thebusiness that can facilitate growth.

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And as a small business grows, their PEO partner will be thereto provide assistance along the way.

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Mike Altiero is the digital marketingmanager for Extensis, a regional PEO headquartered in the New YorkCity area.

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