Full-Service HR

Is It Time to Outsource Your HR?

Ella Baker
Is It Time to Outsource Your HR?
Reading time 7 Mins
Published on Jul 26

Recognizing when and how to seek outside assistance

Your mid-size business is growing, but the stresses of managing the human resources process is becoming more and more of a distraction. One of the most difficult things for many small and mid-size business owners to admit is when they need outside help. Working with a PEO lets you remain in control. Working with a PEO is an investment in your business’ future, ensuring that you are able to provide your employees with the benefits they deserve while gaining valuable time-saving and liability-reducing services that allow you to focus on your core business.

Signs you need help

Small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and, most importantly, are 50 percent less likely to go out of business than those who do not utilize HR outsourcing services. The chief reasons for this are obvious.

Business owners report that among their greatest employment related concerns are taxes, healthcare, and hiring. These are areas that require a high level of knowledge and the investment of significant time to master. These are also areas that align perfectly with the offerings and expertise of PEOs, so it’s no surprise that more owners are turning to HR outsourcing to keep them compliant and able to offer better benefits for their employees.

As your workforce grows, it can become more economical to outsource HR functions. Spending time on issues like FMLA, training, disciplinary actions, and hiring practices can significantly detract from the time you should be spending on growing your business. Your PEO partner can keep you compliant in employment-related matters, lessening your risk of lawsuits and penalties.

Sheakley’s PEO solutions deliver top notch human resources services without the necessity of an HR manager on your team. The technology tools offered by Sheakley allow for easier management of your employees PTO, vacation, check stubs and W-2s. The training and on-going education opportunities Sheakley offers to your supervisory staff will ensure that the day-to-day management of your business remains compliant. The PEO team can help you avoid common HR mistakes that could prove costly to your business.

PEO basics

PEOs partner with small and mid-size businesses to provide outsourced HR management, including employee benefits administration, risk management, compliance with regulatory issues, and training. PEOs work through a co-employment arrangement with a client company, meaning that the PEO shares the costs and risks of employment with the company. Through this arrangement, PEOs are able to provide:

  • Human Resources (HR) Management
  • Benefits Administration
  • Payroll Processing
  • Time and Labor Management
  • Tax Administration
  • Better rates on Worker’s Compensation
  • Safety and Risk Management
  • Employee Relations Support
  • Ensure ACA Compliance
  • Ensure Labor Law Compliance

Understanding the PEO-Employer relationship

The National Association of Professional Employer Organizations states that co-employment is the contractual allocation and sharing of employer responsibilities between a PEO and its client. Under a co-employment agreement, employees are technically employed by both you, the business owner, and the PEO, or co-employer.

You handle all daily duties and core job functions of your employees and you make all decisions about which applicants to hire and which employees to dismiss. The PEO does not supply or make decisions about your workforce; instead the co-employer supplies services and benefits to you and your workforce. You maintain control of all of your business decisions and operations, while the PEO manages employee-related responsibilities like payroll, benefits, and HR administration.

Business owners who align with a PEO in a co-employment relationship transfer a substantial portion of the risk and responsibilities associated with employees to the co-employer. The structure of the relationship allows your PEO to offer better benefits and benefit options, handling of wage and employment tax responsibility, freedom from the responsibility of reporting, collecting and depositing the taxes with state and federal authorities, and assistance with workers’ compensation coverage and claim management.

The co-employment model is all about protecting what makes business successful – people. You and your employees are more likely to succeed when you are able to focus on the daily running of your business and on growing, rather than paperwork. Your employees get access to better quality benefits and you get more time to focus on being the leader of your business.

How to select a PEO

While there are many options available when selecting a PEO, there are some critical factors you’ll need to take into consideration before signing any contract. Making sure that your PEO partner offers all the resources, services, and options your company needs will help you both avoid frustrations down the road.

First, make sure that your PEO partner is accredited and certified. Fewer than five percent of all PEOs have dedicated themselves to becoming accredited by Employer Services Assurance Corporation (ESAC). Providing independent verification and financial assurance of the reliability of your PEO, ESAC accreditation requires compliance with over 40 best practices and quarterly verifications of key functions, including federal and state employment taxes, workers’ compensation premiums, retirement plan contributions, and others. PEO service providers voluntarily undergo the rigors of the certification process and are bonded at their own expense. With the mission of helping PEOs reach their full potential in supporting small and mid-size businesses, the ESAC logo on a PEOs website lets you know that you have a partner you can trust.

Next, you’ll want to know that your potential PEO partner shares the same commitment to service that you do. The National Association of Professional Employer Organization’s latest PEO Pulse Survey reports growth in the industry in 2017 and predicts continued growth throughout the next year. According to NAPEO President and CEO Pat Cleary, “It’s clear that more and more small and mid-sized businesses have realized that using a PEO is good for their business and their employees. PEOs deliver enormous value to businesses by providing HR services and solutions that they would otherwise be unable to afford.” In a growing industry, the importance of having a dedicated staff member devoted to providing the highest quality customer service to every client is greater than ever. At Sheakley, your representative is constantly on the lookout for maintaining the compliance of your company, even recommending money saving opportunities for your business.

Finally, one of the chief advantages of working with a PEO is the opportunity to offer your employees the best quality and affordable benefits plan options. Utilizing its large pool of clients, Sheakley is able to negotiate affordable rates on Fortune 500 worthy benefits packages for your employees and reduced rates on worker’s compensation insurance for your company. Whether an employee takes a spill on the job or at the park, they’ll be covered. Talk to your potential PEO partner about their service areas. Some PEOs offer state-specific service and coverage that won’t work for you if you have employees in other states. Work with your PEO candidates about where you’re currently doing business, where your existing employees live, and cities or states that you might expand your business into later. If your growing business operates or will operate outside of a PEOs service area, then it may not be the right partnership for you.

Let Sheakley meet your HR needs

Accredited by Employer Services Assurance Corporation (ESAC), Certification Institute, and backed by a $3 million Employment Practices Liability Insurance policy, Sheakley’s 120 years of combined PEO experience and expertise are unrivaled in the industry. As your company continues to grow and become subject to more stringent labor laws, Sheakley’s PEO services allow you to remain compliant and focused on the daily demands of your business.

Schedule your free consultation with a Sheakley PEO professional today. For more in-depth information about PEOs, download our What is a PEO e-book today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.

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