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Increasing Business Efficiencies Through A PEO

Increasing Business Efficiencies Through A PEO
Reading time 8 Mins
Published on Jul 9

Streamlining administrative work through a PEO enables business leaders to focus more fully on strategic work to drive growth.

There’s a lot of technology out there to make today’s business systems talk, organize, auto-calculate, auto-prompt, auto-distribute, process data and execute all manner of other administrative tasks. Yet there are still many growing mid-sized companies with owners, managers and support staff using outmoded digital and/or even manual tools for managing increasingly complex HR and associated systems for their growing organizations.

In an ever more complicated world of regulatory compliance and risk mitigation in personnel management, a PEO, like Sheakley, provides unparalleled opportunity for those company owners and administrators who have remained rather frozen in time, to bring their companies into the modern age of tech-enabled business efficiency.

Administrative Transformation of Today’s Growing Businesses

A business is started because its owners are good at something. For example, an HVAC business goes into business because they’re good at installing and fixing air conditioners and furnaces. They don’t launch their startup because they know how to process payroll for overtime, or FMLA paperwork. Spending the company’s limited resources figuring out billable hours for non-company attorneys, or performing myriad other processes is a self-defeating proposition for enterprises working on strategic growth plans.

There are many time-draining processes and tasks that needlessly consume modern business owners and their staff in tangles of administrative management complication. These include calculating and entering hours, tax withholdings, benefits, and manually processing Workers’ Compensation (WC) claims, health insurance claims, safety and other training documentation, paper printing, transferal and archiving, among many others. Today, such complex administrative chores can be off-loaded to a dedicated PEO team.

The Administrative Odyssey of the Small-to-Medium-Sized Phase of Business Growth

Over time, inefficiencies in organizational systems can become increasingly glaring — leading a business owner to that point at which he or she comes to face the reality that it’s time to look for a better way. Your company may have become too large to manage all of the necessary admin systems on your own, even by throwing more of your own evening hours at it, or by hiring qualified professionals. On the other hand, your business may not yet have grown to a size that can support a full in-house HR department. At this stage, outsourcing typically offers the best alternative for growing businesses.

The PEO manages the full scope of HR and related work, including:

  • Payroll processing, Social Security
  • Tax reporting, I9s, reporting income taxes in municipalities
  • Workers’ Compensation
  • Health Insurance
  • 401k administration
  • Compliance issues
  • Legal case management
  • Safety and Risk Management training
  • Other programs and processes

PEO services cover the gamut of HR and related functions. Business owners who’ve been going it alone are right to ask themselves and their teams, “Are we handling things appropriately from an HR standpoint? Are we asking the right questions?” From recruiting interviews to accident investigations there are areas at every turn in which a business owner can quickly find himself or herself in trouble.

Smaller businesses, with just a few employees, can often manage well enough with even the most basic tools and practices for HR administration and risk management. Those with over 500 employees may have reached the threshold at which it becomes more cost-effective to have full in-house HR, Safety, and Risk Management departments. For employers with employee counts between 10 and 500, depending on various cost factors, utilizing outsourced HR and related administrative management is often the most cost-efficient option.

Doing It All On Your Own

In order to adequately manage all the areas of business administration mentioned above, a company needs comprehensive HR software. The software system should include a portal for employees to access their information at any time. It should also include a portal tailored to HR staff members so they can access the necessary functions and resources needed to manage their employees, such as processing paperwork and payroll, updating forms, requesting changes to taxes, examining W2s and pay stubs, and managing compliance. If the PEO client’s company is big enough that it needs a time clock or time system, Sheakley can patch those systems to ours, so there’s a single integrated sign-on.

An employer could spend $75,000 a year to hire a certified HR professional and will still not have the resources that an outsourced provider like a PEO offers. PEO services for a company with 25 employees are a fraction of the cost and can provide a much greater overall benefit.

With a PEO, a business simply assigns a client liaison to gather and supply the PEO team with any information they need by uploading it online. The liaison can be an admin support employee, family member or other person.

In addition to the resources mentioned above, a company would also need the framework and staff to support safety and training programs, benefits, tax and compliance concerns, workers’ compensation, unemployment, legal matters and more. While they could hire other firms and third parties to address each, a PEO can provide a single point of delivery for all of them.

To complicate matters further, a certified HR professional may have general knowledge in a variety of HR areas, but may only have advanced expertise in one or two specific topics, such as recruiting and retention, and little to no experience in others, such as benefits and taxes.

In a small business, the HR-related duties might only total 8 to 10 hours per week. If you hire a full-time certified HR professional, their additional time would need to be filled, usually with non-HR tasks like planning the company picnic, ordering t-shirts, and other busy work. A PEO can offer resources and support on an almost as-needed basis, eliminating idle time that needs to be filled and providing a much more efficient and cost-effective alternative.

Having a dedicated in-house team of HR, Safety and Risk Management experts isn’t practical or affordable for most small or medium-sized businesses. A PEO can provide a one-stop source for all of your needs at a fraction of the cost.

The Costs of Inefficiency vs. The Benefits of Efficiency

Using a PEO has a positive impact on profit margins, streamlines efficiency, increases convenience, and frees up busy business owners and their teams to focus on the company’s core competencies and goals. A fair estimate of the value of all the resources that a business would need to have in order to output at the same level of productivity and efficiency as a PEO like Sheakley is quite staggering. It offers a clear contrast between trying to do it all yourself and having a professional service that can manage it for you.

The difference becomes even more pronounced when you factor in variables such as wrongful termination, EEOC complaints, or other potential legal hurdles. An unprepared and untrained supervisor asking an application illegal or unethical questions and basing hiring decisions on those questions can lead to expensive litigation and settlements, not to mention the potential harm to your company’s brand and reputation. It may never be an issue, but having a PEO’s team of HR experts there to train and educate your staff can be a valuable asset, should the need arise.

Creating a Culture of Efficiency Through Training

Proper education and training is the first step to increasing productivity, consistency, and awareness. Sheakley offers an extensive training library for both managers and employees with topics ranging from FMLA, workplace diversity, interviewing, and team building to accident investigation, safety, employee termination, and emergency action plans.

Sheakley will complete an HR assessment to identify your training needs and build a plan to meet those needs throughout the employee life cycle at intervals appropriate for the training type. Follow-up training reinforces the importance of adhering to the policies and practices learned.

It’s easy to transform the way you train your workforce, with our tool for access to comprehensive courses and a complete system for administration.

Shifting to PEO Management of Complex Administrative Systems

Administrative and HR processes that once seemed manageable may have become too much. Regulatory changes and business growth might be overtaking your best efforts to keep pace. New software, user manuals, and training workshops can offer temporary relief, but cannot fully unburden you. Even bringing a certified HR professional on board can only address a small fraction of the challenges you face.

At this stage, many companies turn to a PEO for help and relief. There’s inner peace in the realization that “I don’t need more tech – I need a real HR department.

There’s a compelling contrast between the HR and administrative functionality that a business owner can accomplish alone and the robust performance available with a PEO’s team of top industry professionals in HR, Risk Management, Safety, Workers’ Compensation, and Benefits dedicated to the efficiency of your business.

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