Administrative responsibilities such as payroll, HR, Risk / Safety and Benefits can tax any company, but for small to medium size businesses with 75 or less employees, managing Human Resources internally can be overwhelming and costing your company thousands if not tens of thousands from your bottom line each year. When you run a small company with limited time and resources, the last thing you want to do is divert your attention from the core business that drives your revenue.

Most small businesses initially add HR responsibilities to the plate of an already overburdened office manager, spouse or finance/operations person. The primary role of a human resources department is instrumental in providing labor law compliance, record keeping, hiring and training, compensation, relational assistance and help with handling specific performance issues.

So, What Are Your Risk of Labor Law Non-Compliance?

Violating labor and employment laws comes with a price, and often a price that’s both tangible and intangible. Aside from possible liability for monetary payments, court costs and attorneys’ fees, companies entangled in legal defense of their actions can suffer insubstantial damages to reputation and corporate citizenship. Small businesses aren’t always exempt from the law because many laws apply to employers with just a handful of workers. Even if your company isn’t required to adhere to certain labor laws, be aware of them and follow them for the sake of your business reputation.

OK, What Benefits do My Business and Employees Gain from Outsourcing HR?

Companies that outsource their HR function gain the advantages of a larger, full-service HR department at a fraction of the cost. The scope of HR is broad, including areas such as recruiting, employee relations, compensation, employment law, training and development, payroll, benefits, and labor relations. With a comprehensive and up-to-date knowledge of all things HR, they are able to contribute measurable value by mitigating organizational risk and increasing performance from the organization’s greatest asset—its people.

Establishing and maintaining up-to-date processes, policies and tools for the HR function takes an incredible amount of time and effort. A reputable Professional Employer Organization (PEO) or HR Outsourcing (HRO) company brings with it the framework and best practices to quickly turn your company into an efficient and effective operation. Rather than spending time reinventing the wheel or suffering from trial and error, your organization benefits from a proven approach that, when done right, is tailored to the culture and unique habits of your business. The result is an infrastructure that positions an organization to be an employer of choice, equips supervisors to be effective at leading their teams, and enables leaders to focus on their core business objectives.

Depending on the PEO or HR Outsourcing provider, services such as compensation planning, recruiting, employee surveys, legal counsel, and leadership development may be included in their Client Service Agreement (CSA). Rarely does a business incur expenses that are static and perfectly align with the annual fluctuations of your business. Selecting the perfect PEO or HR Outsourcing partner HRO provides businesses the ability to easily forecast and manage budgets related to the growth of your employee population.

If your company’s motivation to outsource HR is due to its desire to gain the expertise of an HR department, to leverage efficient and effective infrastructure, or to take advantage of the workforce financial scalability, a PEO or HR Outsourcing is an option worth considering. With over 700 PEOs nationally, and a growing number of HR Outsourcing providers, businesses can select the best partner and fit for their business and employees.

In addition to criteria such as services offered, HR competency/credentials, service philosophy, reputation, pricing, contracts, workers’ compensation rates and deductibles and competitive employee benefits available, companies should also assess the ease of use of their HR platform, new employee on-boarding, the designated team (if any) assigned to service you and, perhaps most importantly, the cultural fit with your company.

As a business owner, it makes sense to offer great healthcare benefits to your employees. Unfortunately, health care premiums on the “open market” don’t always come cheap, so it can be difficult to find a group health plan through a broker that provides you with affordable rates and soft renewals.

That’s where a PEO can provide some assistance. Partnering with a PEO can help you offer premier group health insurance through their “master policy’ or private plan. When you join a PEOs master health insurance plan, you and your employees become part of a large group which can range from several thousand to hundreds of thousand lives. Your broker can not compete with a large regional or national PEO premium rates. In addition, you should find renewals much softer than what you would experience on the open market with your small group. The same could be true with other benefits such as dental, vision, 401(k) and other ancillary products.

How Do I Avoid the Pitfalls and Save Countless Hours of Selecting the RIGHT PEO for My Company?

Simplexity Outsourcing is a Professional Employer Organization (PEO) consulting firm. We are your trusted advisors when it comes to the PEO industry. Simplexity Outsourcing Consultants brokers out PEO & ASO services through regional and National Accredited PEOs.

The Founding Partners of Simplexity combined offer their clients over 20 years in PEO experience and over 60 years of entrepreneurial business success. We have exceptional knowledge in the industry, and thoroughly understand the PROs and CONs of partnering with a PEO. Due to our extensive PEO and business experience, we can better understand the needs of our clients and to recommend a solution that accomplishes their goals and ambitions.

Partnering with a PEO can be a difficult and daunting decision for the owner, business and their employees. With over 700 PEOs nationally and because ALL PEOs are NOT equal, it is difficult for a business owner to narrow down the RIGHT partner for their company.

What Are the Cost Associated Partnering with a PEO or HRO?

For most small business owners, price is going to play an important role in deciding on which PEO or HRO company to choose. However, HR outsourcing services are highly customized based on the needs of the client. It’s important to understand that costs can vary anywhere from $45 to $100 per month per employee. Charges can range from 3% to 5% of each employee’s pretax monthly salary, which means that the total cost will vary considerably based on size. In some cases, services can be outsourced for a flat monthly fee as well. Should you consider outsourcing to a PEO or HRO, you should consider the potential annualized savings from the cost of healthcare, State Unemployment Taxes, Workers’ Compensation premiums and the savings associated with their services.

How Simplexity Helps Clients Navigate Through the Weeds:

  • During our first meeting, Simplexity completes a FREE HR Discovery Analysis which helps us to understand your business culture and criteria.
  • Depending on the criteria we gather in our Discovery Analysis, we narrow down the PEO’s that can and will deliver the needs for your business.
  • If finding affordable and quality Health Insurance is a determining factor, we will gather from you the information required for health insurance underwriting.
  • Forward the information to underwriting to one or more PEO’s.
  • Monitor the process.
  • Present to you their FIRM rates.
  • Help and guide you through the decision process.
  • Arrange and attend the introductory meeting with the awarded PEO.
  • Schedule the open enrollment and on-boarding with your PEO partner.
  • Quarterly monitoring of their service performance.

We accommodate most every industry from white collar like accounting firms, law firms, technology and IT firms to gray and blue-collar industries, to include manufacturing, machine shops, HVAC, plumbing, construction, distribution, food services, logistics, nursing homes and daycare centers. In addition, we can help higher risk industries as well, including transportation and more. If you’re in business – we can assist you.

Our partnership team consists of licensed insurance agents as well, giving us the ability to give our client’s a full range of options, from the open and standard markets as well as the PEO master plan market. So, our clients can make a fully educated and unbiased decisions. Simplexity Outsourcing is always here to assist our clients with Empowering Their Business Growth.

Call 281-394-4933 for your FREE HR Discovery Analysis today.