As Chief Financial Officer (CFO), your primary responsibility is managing your company’s finance and accounting team. In recent years, however, many CFOs have jumped into the management of more Human Resources (HR)-type functions. These responsibilities may include training, recruitment, managing the organization’s talent, in addition to retaining the responsibility for the costs associated with these functions.
Applying the CFO’s skills to the needs of HR strategies is appropriate because the CFO’s skills are an excellent match for:
- Designing compensation packages that offer competitive but cost-effective benefits;
- Mapping out employee performance evaluation schemes;
- Building an executive team through competitive recruitment efforts; and
- Managing the company’s regulatory compliance duties.
Regrettably, that’s a huge job description to add to the CFO’s core duties and responsibilities. The answer to alleviating some pressure is to hire a Professional Employment Organization (PEO). A PEO is the CFO’s potential partner that can help formulate strategic, cost-effective decisions arising from the HR arena. The CFO can then position those responses in support of the business’s overarching master plans.
The following paragraphs provide a brief description of the tactical advantages a PEO may provide to HR functions that a CFO oversees.
Developing the Competitive Compensation Package
Retaining top talent in your company’s field of expertise is the CFO’s critical job one. Retaining current employees who fit into the top talent category often reflects the need to offer more competitive benefits. This is true for current employees who actively seek new employment and for those who are wooed away from your company by competitors.
In addition, recruiting top talent becomes more competitive as the employee shortage continues. For example, in the technology arena, industry observers predicted that in 2020 there were 1.4 million computer technology jobs but less than half a million graduates with the skills to fill those jobs. And that prediction was before the pandemic upended the global economy.
One of the most important approaches to attract and retain coveted candidates is to offer a competitive compensation package that includes health benefits and fringe benefits. LinkedIn’s Global Talent Trends 2020 Report found that one of the top three reasons employees look for another job is that they seek higher compensation and more benefits.
Naturally, as CFO your abiding concern is the financial impact of such benefits. You want to offer a more competitive compensation package while making sure the benefits package is a cost-effective endeavor. A PEO can provide the overall vision into the compensation and benefits currently provided and suggest ways that the company can better match the desires of the workforce. A PEO has experience with multiple clients to provide valuable insight to this process.
Should your business be partnering with a PEO? Learn more!
Developing a Process for Employee Performance Evaluations
An experienced PEO can help develop a company’s employee performance evaluations as part of the essential employee review process for any small-to-midsize organization. Retaining top employees is critical to a company’s profit margin as the competition for talent increases. The CFO wants to make sure the company is getting the most productivity out of the money it spends on retaining its employees. A PEO helps you design and implement performance reviews and conduct them on a regular schedule. They can also help design and implement employee reward and recognition programs.
Keeping Compliant with Employment Laws
An experienced PEO can help reduce the risk of having employees by managing legal and regulatory compliance. For example, a PEO should:
- Make sure to report, collect, and deposit state and federal taxes correctly;
- Comply with I-9 requirements;
- Report EEO claims and provide EEO claims resolution;
- Manage Employee Practice Liability Insurance claims;
- Manage and help resolve employee claims for workplace injuries;
- Provide employee handbooks;
- Assist with employee drug-testing services and employee verification.
Making Sure to Select a Transparent PEO
When selecting a company to provide PEO services, make sure the candidate firms provide transparency as to the costs and fees associated with their services. This is especially true when it comes to payroll taxes and workers’ compensation claims where some PEO companies hide the true costs.
HR Is Taking Too Much CFO Time
Absorbing HR duties into the CFO’s realm often results in the project bleeding the energy out of the CFO. Before that happens, the shrewd CFO recognizes the need for a partner who demonstrates people skills. A PEO can help small businesses offer the advantages of larger competitors, such as:
- 401(k) plans,
- Insurance benefits for life, health, dental and vision, and
- Dependent care programs.
PEOs have access to more options and will negotiate annually with carriers, freeing you from a time-consuming and daunting task.
Take the Next Step
PEOs help over-burdened CFOs by reducing employee turnover, designing strategies to motivate current employees, and building strategic pathways to future goals for the company. Viewing your company’s HR services and benefits through a single-window powered by a PEO means gaining a better perception of your company’s investment in its workforce. We invite you to visit our blog to learn more about how we can help you grow your business.
