As new technologies emerge, regulations change, and industry demands grow, the complexity and diversity of HR tasks increase exponentially. Many companies don't have large enough HR departments to handle the mounting pressure, which can cause errors, burnout, and reduced flexibility.
That's where outsourcing comes in. By delegating some or all your HR tasks to a Professional Employer Organization (PEO), you can remove a significant burden from your internal team. This, in turn, allows your employees to focus on their responsibilities and revenue-generating tasks.
By handing manual administrative tasks over to a team of professionals, you increase your company's flexibility, support scalability, and save money.
How HR Outsourcing Increases Flexibility
The average HR staff-to-employee ratio is 2.57. It means that roughly, for every 100 employees, you have two to three HR staff members. These two people often don't have the time to handle the mounting HR tasks and properly support their staff. They must spend significant time managing mundane administrative processes instead of focusing on increasing retention, improving the workplace environment, and making important recruitment decisions.
In smaller companies, management often delegates HR tasks to employees without the proper education and experience simply because the HR department doesn't have time to handle them. That, in turn, leads to errors, low employee satisfaction, compliance issues, and much more. Companies that outsource administrative tasks to a third-party HR service provider gain valuable time to focus on their greatest asset – their staff. Meanwhile, upper management can work on strategy and data-based decision-making instead of handling HR tasks.
Such outsourcing doesn't mean giving over control of HR activities to a third party. PEOs only provide the necessary support. The HR department and management still make all HR-related decisions and dictate their preferences to the outsourcing partner. But the freedom and attention you gain back for leadership allows you to think further ahead and implement business policy and
PEOs Streamline Internal Processes
By working with a PEO, you can streamline internal processes and contribute to high employee satisfaction rates.
- Hiring – PEOs can help you find suitable candidates, improve the interviewing process, and provide the necessary technology to turn your business into an employer of choice. These organizations have connections, experience, and resources to find candidates with high potential.
- Onboarding – PEOs help with onboarding by preparing the correct documentation, making the necessary information readily available to the new talent, ensuring compliance, updating employee handbooks, handling payroll, and much more.
- Training – PEOs can help arrange professional training for your workforce by identifying learning tools and sites, hiring experts to run training sessions, and designing seminars specifically for your employees.
A seamless recruitment, onboarding, and training experience make your workplace more flexible. Your employees gain an opportunity to hone their skills and enjoy access to much-needed information. That demonstrates your deep involvement in their success and drives engagement.
As a result, you can see a significant increase in productivity and retention, which directly impacts the company's growth. PEOs help businesses automate and streamline HR, adding flexibility to all internal processes and driving the company forward.
Cost Savings Let You Spend More Effectively
By working with a PEO, you can reduce a significant number of costs related to HR, including:
- Benefits – a PEO uses economies-of-scale to give their clients access to Fortune-500 level benefits, meaning your employees can get excellent benefits without you having to pay high premiums. As a result, you can save a sizable amount while still positioning yourself as an employer of choice and decreasing the cost of turnover.
- HR staff – hiring new HR staff members is a large investment that includes recruitment, onboarding, and retention costs. Meanwhile, high churn rates across many industries decrease the ROI from this decision. With a PEO, you save money on recruitment while gaining access to a team of experts without worrying about turnover.
- Compliance – working with a PEO includes outsourcing compliance tasks to professionals. Their industry knowledge and experience can help you avoid costly compliance errors and save money on rectifying them.
You can reroute the money you save by working with a PEO to supporting your staff or exploring new business ventures. That encourages tremendous flexibility and allows your business to create new courses for growth and development. Meanwhile, it can help you adapt to ever-changing industry situations and become more resilient to economic downturns.
Streamlining Flexibility By Partnering with a PEO
Working with a PEO allows you to save valuable time and money while improving employee satisfaction, retention, engagement, and productivity. All of this has a direct effect on the flexibility of your company.
With a strong outsourcing HR partner on your side, your business gets a valuable instrument. This collaboration gives your company room for maneuver when facing external factors like the Great Resignation, looming economic downturn, or growing industry competition.
