Business costs grow as your company grows to support all the new responsibilities that come with expansion. However, expanding your business should never be a deterrent, so planning to handle them is critical.
While acquiring new market share, you must prepare to balance expenses that may reduce the positive effects of your increased revenue. To reap the benefits of your growing presence in the market, you need a way to stabilize costs – which is where a professional employer organization (PEO) comes in.
In this post, we'll take a closer look at how to reduce business costs with the help of a PEO, no matter how quickly your company expands or expenses rise.
PEOs Stabilize Costs by Improving Efficiencies
No matter how many new employees you hire, the abundance of manual HR tasks continually grows. Payroll becomes more complex. Benefits administration demands more time. Meanwhile, the recruitment, hiring, and onboarding processes require a more comprehensive approach. All of this leads to extra costs and contributes to employee burnout.
As your business changes, you must emphasize your existing workforce and make important internal recruitment decisions. An overwhelmed HR team may be unable to handle the load while busy with multiple administrative activities.
When you partner with a professional employer organization, you can delegate most of your administrative HR tasks to them, giving your HR team more time and opportunity to create a positive company culture, nurture a comfortable work environment, and make personnel management decisions.
This collaboration can help you streamline business functions and reduce costs that snowball as the company grows. You can use their robust HR expertise to manage an expanding workforce and avoid the growing pains that come with having to develop or expand an internal HR team. Your existing team can handle more with less stress, letting them focus on providing the best experiences to your staff.
Make Adding Employees Simpler
As new employees come on board to take on increasing tasks, your HR department has to accommodate them by adjusting payroll and benefits administration tactics.
Each new employee can add more time to payroll calculations, especially if you aren't using high-quality software. Meanwhile, the individualized approach to benefits for new team members could toughen your administration's efforts, especially with their costs rising yearly.
The more employees you add, the more time you spend on HR activities, which, in turn, leads to higher expenses.
By working with a PEO, you can minimize the effect of adding new team members. You can delegate payroll and benefits administration to the experts who leverage the latest tools that ensure speed and accuracy. With this partner handling your administrative tasks, you can avoid the burden of managing this growing workforce.
Achieve Healthcare Cost Savings
Healthcare costs are rising rapidly, which is another factor that leads to higher benefits expenses. As your team grows, the focus on these costs becomes more significant. Meanwhile, reducing the quality of benefits is out of the question for a growing company since it can keep top talent from considering it as the place of employment.
Unless your company is large enough to qualify for Fortune-500-level benefits, you will likely feel the effect of rising healthcare costs. To stabilize these expenses, you can use the PEO's ability to leverage economies of scale.
Professional employer organizations put all their clients' employees in one pool and use it to negotiate better rates with healthcare providers. That can immediately affect your benefits expenses and turn your company into an employer of choice for many talented specialists.
Better benefits directly affect employee satisfaction and engagement, leading to higher productivity rates and reducing unnecessary expenses.
Improve Productivity by Supporting Staff
As the number of employees increases, so does the volume and complexity of administrative tasks. Overwhelmed HR team members spend more time on payroll processing, benefits administration, employee handbook adjustments, and other matters. That can prevent them from working on new tactics that can support the workforce.
When the company develops, existing staff usually have more responsibilities that, if not managed properly, can impact their well-being, lead to burnout, or decrease overall job satisfaction.
By partnering with a PEO and delegating these mundane tasks to another team, you are giving your HR department more opportunities for staff support. They gain more time to help the growing team plan their career path and take advantage of all existing development opportunities.
Meanwhile, PEOs can arrange training for new employees to help bring them up to speed quicker, enhancing productivity, shortening onboarding, and reducing recruitment expenses.
Leveraging PEO Collaboration to Stabilize Expenses
If you are wondering how to reduce business costs associated with the growing workforce, you can consider partnering with a PEO. This collaboration can help you stabilize costs by reducing benefits expenses, taking the administrative burden off your HR team, and streamlining onboarding for new team members.
Besides cost reductions, a PEO partnership can contribute to improved operations efficiency, higher employee satisfaction, and new business growth and development opportunities.
