Outsourcing Small Business HR Services to a PEO

Small business HR services are more critical than ever. According to the Small Business Administration, the United States is in a small business boom, with 10.5 million new small business applications in 2020 and 2021.

Small businesses are a vibrant and impactful part of our economy. They can create specialized services and products to meet niche needs, stay nimble and respond to changing opportunities and threats. Close contact with customers and the contagious passion of the business owner contributes to the success.

Each year, more successful small businesses leap from nonemployer sole proprietors to employers. With that hire of a first employee, along comes a whole cadre of human resources laws and regulations. As your business continues to add employees, human resources become more complex. Many small business owners find that they spend most of their time on human resources and benefits. And they don’t like it.

Outsourcing small business HR services to a Professional Employer Organization (PEO) can help small business owners return to the focus of their mission. PEOs are the top level of human resources outsourcing. The structure of the PEO relationship is one factor that contributes to its success. The small business and the PEO become co-employers. The small business hires, manages, trains, and rewards its employees, while the PEO is the employer of record. They are responsible for all payroll, benefits, and compliance. They ensure that all requirements are met, from hiring to retirement and everything in between. Because they work with other small businesses, they can leverage their buying power to give your employees world-class benefits at a competitive cost. Your PEO manages all the HR paperwork and processes so that you and your team can focus on your business.

Small business owners who contract with PEOs are often delighted with this arrangement. These businesses grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business than their peers who go it alone.

Why Might Small Businesses Need to Outsource Human Resources?

For small businesses, there are many benefits to outsourcing Human Resources to a PEO. Here are a few circumstances where a small business should consider a PEO.

  • Your business needs to hire talent from all over the country or globally. Compliance requirements vary from state to state and country to country. The risks of noncompliance include heavy penalties that could bankrupt a small business. Staying abreast of the requirements is a considerable investment in time and talent. By outsourcing to a PEO, you can ensure that you meet the requirements wherever your talent pool resides.
  • You know that other companies can offer more attractive health, retirement, and other benefits at a lower cost. You could benefit from a PEO if the management and expenditure of fringe benefits are high for your small business, and yet you are not in a competitive position for recruiting and retaining talent.
  • Your business has experienced turnover in your HR team, and you are concerned about business continuity and knowledge management.
  • Your business is experiencing high turnover.
  • You and your management team are spending too much of your time attending to human resources needs, pulling the focus away from your core business activities. This obligation impacts your ability to grow your business and deliver value to your customers.
  • You are in a growth cycle, and it’s time to re-evaluate your organizational structure and get the most value for your business.

Contact Us Today

Are you ready to find out if outsourcing with a PEO is right for your small business?

With innovative technology, a knowledgeable staff, and personalized attention, TANDIUM Corporation can help you take your small business to the next level. TANDIUM Corporation serves the Human Resources, Payroll, and Benefits needs of small and medium-sized businesses and non-profit organizations.

Contact us today to schedule a free initial consultation if you are ready to learn more about how a PEO can help your business thrive.