Small businesses have a lot they have to keep track, ranging from taking care of business formation correctly to transitioning from a hodge-podge of contract services and partners to a full-fledged company with management and employed staff. However, it’s one thing to identify what needs to be done and actually implementing the full structure and approach as a business process. Especially with human resource office functions, many processes until just recently were very people-intensive. And even now, with very powerful tech programs, HR still remains a heavy use of expert technical help to run those systems correctly. As a result, HR remains a high cliff for any business to climb, and even higher for a small business trying to get its footing. A PEO helps solve this challenge effectively.
What to Expect from a PEO Partnership
The most common areas that a PEO can be applied to tend to be in payroll management and distribution of employee benefits. Both involve multiple, regular transactions with frequent technical applications and impacts on costs, taxes and reporting. No surprise, this tends to contribute to the perspective of PEOs only providing targeted outsourcing for heavy-processing functions. This is not true, however.
PEOs also provide a wide variety of additional employer HR services, many times being surprises to clients when they find out. In fact, a fully-qualified PEO can literally replace every function of an in-house HR office and provide a seamless experience to the point that employees wouldn’t really be able to tell the difference.
Additional Advantages
PEO benefits also include help with designing and revising compensation structures. Equitable pay is a very sensitive issue, and differences that don’t have an operational basis can quickly turn into legal matters for unequal treatment, especially if it seems the differences border on protected classes. With a PEO approach, those legal landmines are avoided, and a viable structure can be developed that provides an attractive structure that can also generate retention as well. This includes competitive analysis with current market offerings and long-term planning to meet goals, growth, differentiation and industry standards. This particular benefit is incredibly useful as it sets the salary pace and how to adjust for changes in the future at every level of the organization.
Objective survey evaluations and reviews can be incredibly useful. Asking management about “how things are,” frequently ends up with a biased response. No one wants to point out their program might have some issues where it’s not necessary. With employee surveys, management hears directly from the employees themselves. Using a third party as the data collector, staff may feel far more open in responding honestly versus just giving the “right” answer to an immediate supervisor.
Training and succession development play an important role in the ongoing success of a business. Without the next wave of employees ready to take on promotions and new assignments, it becomes very hard for a company to expand itself or replace leaving talent. By instituting a career path portfolio approach for employees, a client company through a PEO can track as well as determine how to develop employees long-term for best results and retention.
Management coaching is another hidden gem PEOs can provide. Many in management assume that once they reach supervisor level, everything is experience-based. This is inaccurate. Ongoing training, changes in legal requirements, leadership development and complex management training in both hard-skill and people-based soft skills are essential for making the transition from middle-management to executive level. PEOs can easily leverage their expertise and consulting assets to provide this service.
Finally, one of the biggest areas that doesn’t get a lot of fanfare tends to be employee assistance programs. Employees are human, and despite the fact that they are expected to show up and focus on work issues, they still have lives at home that can become challenging. Employee Assistance Programs help staff by providing objective counseling and well-being guidance on a variety of concerns, from stress to crisis intervention to financial advice and more. Helping an employee work through a personal issue via an EAP program can be particularly beneficial, retaining that staffperson and returning them to a productive level.
Not Just for Payroll Processing
In summary, a PEO can be as much or as targeted a benefit as a company client wants. This flexibility makes a PEO ideal for companies that might need varied support at first and changes later on. Not only does the flexibility match unique needs better, it helps far more with planning forward as well.
