HR Outsourcing Companies Like PEOs Can Save Your Small Business Time

Your employees are your greatest resource – so why is staff management such a concern for small business owners? Managing human resources takes an outsized portion of resources and budget for many small businesses. The management of employees and compliance requirements also introduces a high level of risk, as fines and settlements can bankrupt a business. And while small businesses are a vibrant and innovative part of the US economy, they often have a challenging time competing with larger companies for employees. That is where HR outsourcing companies can help small businesses compete with larger firms.

Small business HR challenges tie to economies of scale. Corporations can offer employees world-class benefits like health insurance, dental insurance, and retirement savings plans because their size gives them more buying power. They can afford to employ human resources specialists who are highly trained and stay abreast of compliance requirements and federal, state, and local laws and regulations. Large businesses can invest in state-of-the-art Human Resources Information Systems that automate key HR workflows while protecting the data. Trying to stay ahead of the curve, many small business owners find themselves investing a disproportionate amount of time in managing human resources – ultimately taking them away from the core business functions that made them get into business in the first place.

Many business owners have found a solution – working with a Professional Employer Organization. Professional Employer Organizations (PEOs) are special outsourcing arrangements between small businesses and HR firms. In 2020, 173,000 small businesses outsourced their HR to PEOs for a combined workforce of 4 million. That’s more than 15% of all businesses from 1-99 employees. PEOs and small businesses are co-employers that share employer responsibilities in clearly defined ways. PEOs are the employer of record and handle the legal and administrative responsibilities for the small business’s employees. The small business retains management and control of duties and scheduling. This arrangement removes risk and frees the small business’s time.


5 Benefits of Outsourcing Human Resources to a PEO 

  1. When a small business outsources human resources to a PEO, it can let go of the time-consuming administrative and compliance tasks and focus on its core business. When business leaders can focus on the core value of their business, customers are more satisfied. Small businesses often experience growth when engaged with a Professional Employer Organization. According to the National Association of Professional Employer Organizations (NAPEO), small businesses using a PEO grow 7-9% faster than comparable businesses. Small businesses that partner with PEOs can offer their employees world-class benefits thanks to the buying power of the PEOs. This levels the playing field, allowing these businesses to compete with large employers for talent.
  2. Small businesses and their employees can access state-of-the-art Human Resources Information systems through the PEO. These systems automate workflows, save time, and provide management with meaningful and insightful analytics to allow them to engage better, develop, and retain employees.
  3. The owners of small businesses that work with PEOs can experience greater peace of mind knowing that all the administrative and compliance tasks are handled professionally and on time at every stage of the employee cycle, from recruiting, hiring, onboarding, and developing through the end of employment.
  4. Small businesses that partner with PEOs have access to highly skilled human resources specialists who know their business and their employees. These professionals can guide firms to meet strategic and operational business goals or problem-solve complex and nuanced human resources issues.


Contact Us Today

With over 30 years of experience, TANDIUM Corporation specializes in serving the Human Resources, Payroll, and Benefits needs of small and medium-sized businesses and non-profit organizations. We’ve seen firsthand how businesses thrive when they can free up the valuable time invested in the time-consuming, day-to-day human resources operations.

If you are ready to find out how a Professional Employer Organization can bring value to your business and your employees, contact us today to schedule a free initial consultation.