Your HR team is essential to your business, whether it’s one person or several. You rely on them, and because of that, you assume that you don’t need to outsource your HR.
The fact is that your HR team should not be expected to handle all of its functions, from the tedious to those which require more skill, nuance, and knowledge of your community. Outsourcing to a California PEO is not about replacing your HR team but rather working collaboratively to provide the solutions you need.
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PEOs Don’t Want To Replace Your Team
Your team is probably doing a lot of tasks that they don’t really need to. Payroll, for example, takes up a lot of time (typically 5 hours per pay period just on calculating taxes). Even with software assistance, payroll is time consuming, tedious, and requires knowledge of regulations and compliance. By taking on these tasks, a professional employer organization (PEO) frees your HR team to concentrate on the things only they can do, such as bringing out the best in your existing staff.
It’s not the goal of a PEO to handle the in-depth strategic matters that require a deep knowledge of your company and its plans. While they need to know the overall picture to provide you with the support you need, their ultimate goal is to make sure that your outsourced HR functions meet full regulatory compliance. Also, PEOs have the expertise to assist you in crafting a benefits package that will attract quality talent to your company.
Let Your HR Team Be The Experts
You have worked hard on selecting and training your HR team. They have high-level training, certifications, and specialties and should be able to concentrate on those. Your HR team needs to use their training and knowledge to work at the strategic level, looking out for your company’s needs and planning new hires and other changes as your business grows.
PEOs can focus on nuanced aspects of the HR function and free up your internal team for matters related to their specialized skills. PEOs can handle payroll, taxes, and compliance while leaving your people with the time and space they need to develop your company. They can also help you avoid using non-HR staff, or even the owner, to handle HR matters during crunch times.
PEOs Provide Cost-Savings
Internal HR’s time is valuable. As your company grows, you have to consider adding people and thus increasing costs. According to PayScale, the national average base salary for an HR professional is $58,705 a year, and HR managers can cost as much as $100,000. This, of course, doesn’t count taxes or the benefits you need to provide. California is notoriously expensive when it comes to hiring internal HR professionals, making outsourcing that much more attractive to small businesses.
Using a PEO allows you to keep your team smaller and more focused. It also means you can leverage the time of your highly-paid and highly-trained HR specialists wisely while delegating tasks like benefits administration.
PEOs also reduce overall costs by allowing you to spend less on benefits while offering a more competitive package. The larger pool of employees across the PEO’s clients reduces spending, especially on healthcare and workers’ compensation. Improved benefits minimize employee turnover and related costs, and improved compliance from their expertise reduces the risk of penalties.
Because your HR team is focused on business strategy, you can scale faster while building a reputation for being a great place to work. This, in turn, attracts better talent and continues to support growth.
If your HR team is spending too much time on day-to-day functions, working extra hours, or begging time from other departments, you might want to consider working with a PEO. This partnership will free up your internal HR specialists to accomplish your organizational goals.
To find out more about working with a PEO, check out our blog.
