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HR Outsourcing: Is It Right for Your Business?

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In this day and age, outsourcing is becoming the new normal in business. More and more companies are choosing to downsize and outsource their daily tasks to other contractors or companies. This can be a good move for the right business. Not only does it allow the work to be done properly the first time, it means business owners can spend valuable time on things that matter most in their business.

Human Resources has grown as a field recently. While it previously was limited to things like payroll, hiring, and firing, it’s now much more of a challenge to find skilled HR employees who can handle a variety of different responsibilities. HR employees spend much of their time jumping over hurdles in compliance, making them less available for more important tasks that benefit the entire company. That’s why many companies today both large and small have began to outsource their HR. Is this the right move for your business? Keep reading to learn more.

What is a PEO?

A PEO is a Professional Employer Organization. These are services which can be outsourced to handle HR tasks, management, and more. While PEO’s do many different things, they generally handle things like payroll, recruiting, training, and insurance. Because they’re dedicated to these tasks alone, they’re able to devote more time to benefiting the company. shares some of the main factors for evaluating PEO companies to help you explore your options.

Is It Time to Outsource?

If you’re a small business owner, you already know how frustrating it is to spend time on things that aren’t directly building revenue for your business. You already have a lot on your plate, and you don’t want to waste time doing things that don’t immediately boost your business. HR tasks are time consuming. Things like payroll and hiring new employees take a lot of time, paperwork, and energy. You might be wondering if it’s time to outsource to a PEO.

While PEOs aren’t right for every business, they can offer a lot of benefits for those who are the right fit. Is your business ready to outsource? Answer these questions to decide for yourself:

How Many Employees Do You Have?

The first thing to ask is whether you have enough employees. While most small businesses have under 20 employees, there’s a point when it’s too small to hire a PEO. Most PEOs work with businesses that have at least 10 employees. Administration processes can take up a lot of unnecessary time for small businesses, and in these cases it doesn’t usually make sense to hire an in-house HR manager. For small businesses with under 100 people, having a PEO service might be both a money and time saver.

What Services Does Your Business Need?

If you decide to choose a PEO for your business, you’ll need to understand the services that are most important to you. With so many PEO providers to choose from, you need one that aligns closely with your needs. Look for the PEO companies prior work and what industries they’re familiar with. Some PEOs are specialized for different industries so you can get the support you need when you need it.

Can Your Business Afford a PEO?

PEO is a professional service, and it’s not something every business can afford. The pricing will depend on the company you choose to work with, but it generally will cost a small percentage of your wages. Calculate how much a PEO would cost per employee each year. In most cases, it’s more affordable to outsource your HR than to hire a full-time employee to take over these functions. Ultimately, it comes down to how much you value your time and these HR services.

If you’ve decided a PEO is right for your business, be sure to do your due diligence. It’s worth searching for the right fit for your business so you can find a PEO that supports your daily functions. There are a lot of benefits to hiring a dedicate PEO for your business! Stop wasting your precious time with tasks that aren’t progressing your business and pass those along to a qualified expert.

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