Startups need the flexibility to grow on a dime. Hiring full-time HR professionals is a costly investment that can impede your organization’s journey, but you also can’t afford to let any of the facets of good HR management fall to the wayside. See how a PEO can support your startup’s growth and ensure it has a strong foundation.
Learn more about what you should expect from your outsourced HR partner
5 Ways a PEO Can Help Startups Manage HR Tasks and Responsibilities
HR departments do a lot of things behind the scenes. While you need to focus on product development and fundraising, the PEO can help you manage other organizational requirements. See these top five benefits of outsourcing HR services to a PEO when you have a startup. The PEO:
1. Creates HR Policies and Documents
Every growing organization needs a solid infrastructure of HR documentation. This can include company-wide policies, hiring paperwork, employee handbook, NDAs, and technology agreements. Having paperwork that complies with the requirements for your state is essential for protecting your new organization from liability. It also creates a level of professionalism and organization that investors are looking for when evaluating whether or not your organization is a worthwhile venture.
2. Manages HRIS Setup and Maintenance
A human resources information system (HRIS) is a software or platform that manages your organization’s core HR-related needs. This is the hub your employees might operate through to change their direct deposit and retirement investing specifics, verify that they’ve completed necessary training, and sign required documentation. HR professionals will also use this to disseminate tax information, analyze employee data and people management practices, and other tasks. Implementing the system, inputting data about new employees, and keeping the system both functional and up-to-date is a highly time-intensive process that could bog down your internal team.
3. Manages Payroll and Benefits
As organizations grow, they need larger and larger teams to manage bi-weekly or monthly payroll obligations, payroll taxes, and benefits contributions. But having a large administrative crew can bloat your organization so it can’t focus on growth and innovation.
A PEO can manage all of those tasks and more in conjunction with other HR objectives. Not only does this automatically reduce your costs, but a PEO can also process payments and benefits faster because they are familiar with all the working parts of the packages they offer. Streamlining your organization is always advantageous. Through a PEO, you can also align with other organizations to negotiate for more competitive benefits packages that bring top talent into your company.
4. Ensures Legal Compliance for Reduced Liability
HR teams manage legal compliance behind the scenes. This includes visible processes like resolving workplace conflict, ensuring fair hiring practices, and complying with workplace safety provisions. But organizations are also legally liable for a lot of detailed compliance that your founder, salespeople, and IT professionals may not know about. This can include seemingly granular details like:
- If your team of full-time employees is large enough that you have to provide certain health care plans to comply with state or federal regulations
- Managing non-discrimination testing that measures the accessibility and fairness of your 401(k) or other tax-advantaged retirement benefits
Failing to adhere to all of the local, state, and federal requirements and protections your employees are entitled to happens – even for startups with the best of intentions. PEOs have internal experts familiar with the requirements of applicable legislation so they can easily manage the responsibilities. This, in turn, protects your startup from costly legal action, time-intensive resolution and mediation processes, and the bad reputation companies get for even accidental infractions.
5. Assists in Expanding Operations or Hiring Remotely
If your startup is successful and you want to establish a second location in another state, not all of your local knowledge will apply. Instead, the right PEO will have experts in your second location’s applicable policies so you can expand without a hiccup in your product timeline. PEO staff can also guide you on the best practices for hiring employees in another area, handling taxes, benefits, and more.
Think of a PEO as both administrative manpower so you can get these changes made and an expert looking over your shoulder to make sure there aren’t hidden tasks that can trip up your organization.
Strengthen Your Organization by Choosing the Right PEO
PEOs are the experts in HR and operational procedures across multiple different locations and industries. You benefit from their expertise and experience without having to take on the costs of hiring full-time in-house personnel with the same qualifications. You can maintain growth at a steady pace, quickly scale your company’s growth, or even be sure your company is in good hands during compliance audits. Contact us today to learn more about how we can be your partner and scale with you throughout your startup’s journey.
