How to Grow Your Small Business 7-9% Faster With a PEO
Has your business experienced a surge in growth over the past year? Expanding your products and services, adding team members, and maybe even opening a new location are all exciting new opportunities – but they can also send your stress levels skyrocketing.
As a business owner, you’re already wearing an entire team’s worth of hats, and the success or failure of your business depends on your ability to wear them well. But as your business grows, filling all those different roles yourself just won’t cut it anymore.
That’s when you need to consider reaching out for help.
Businesses that enter a growth stage face a whole different set of challenges than they did when they were just starting out. Here are just a few:
- Too much work, not enough time
- Expanding teams requiring additional oversight
- More complicated HR processes
- Cash flow management
- Building the right infrastructure to support you as you scale
- Delegating responsibilities effectively
- Increasing technology needs
Drop the ball in just one area and you could be facing a deluge of problems including unhappy employees, burnout, missed deadlines, errors, and even legal claims or fines.
As the business owner, your attention should be focused on strategy and core competencies, not monopolized by details like employee handbooks and onboarding paperwork. Still, those details are important, and they need to be handled with care and integrity. The solution is to delegate non-core responsibilities to others so that you can use your time and resources most effectively.
Growing businesses most often outsource the parts of the business that need greater process sophistication or that have simply become too burdensome to manage internally without hiring additional staff. In the HR department, payroll is commonly handled by a third-party provider, and it’s not that much of a leap to consider delegating other parts of your HR function as well.
Here are 4 reasons that’s a smart move:
1. PEOs help businesses grow faster.
According to the National Association of Professional Employer Organizations (NAPEO), working with a PEO can help your business grow 7-9% faster. That’s because business owners can focus their attention on growth activities like product development, sales, and marketing rather than getting buried in the administrative details of HR. When you work with a PEO, you can delegate:
- Payroll
- Benefits administration
- Workers’ compensation
- Claims management
- Compliance
- Tax administration and filing
- Open enrollment
- Onboarding
- Employee self-service
Imagine all the strategic strides you could make if these things weren’t monopolizing your time.
2. PEOs can literally keep your doors open.
NAPEO also reports that small businesses are 50% more likely to stay in business when they work with a PEO. That’s because PEOs help businesses deal with time-sucking tasks that keep them from focusing on big picture issues.
So what are the primary reasons businesses fail? Forbes lists the following issues among the top ten precursors to business closure:
- Outperformed by a competitor
- Didn’t have the right team
- Money management issues
- Insufficient business model
- Poor marketing
- Ignored Customers
For the most part, these are strategy issues. They require strong leadership and vision. But too many companies fail to get the big picture things done because they are too busy managing details. When you partner with a PEO, you can offload those details to a trusted partner who will work with you to make sure your employees are cared for, your taxes are paid, and your business is compliant.
3. PEOs Help You Manage Risk
Risk is the silent (and sometimes not-so-silent) companion of any business endeavor. If you don’t have a plan in place for managing risk potential, you’ll be caught off guard when injuries happen, lawsuits threaten, or fines accrue.
As your co-employer, a PEO will help you face those risks head on. They will keep you up to date on compliance regulations, provide safety assessments and recommendations, manage workers compensation claims, provide safety training, and keep you up-to-date with OSHA requirements.
4. PEOs Give You the HR Infrastructure You Need to Scale
Scaling your business usually means reevaluating your internal structures. As the size of your workforce increases, you will need more sophisticated policies and procedures to keep everything on track. In your HR department, that means formalizing responsibilities, addressing challenges in your current practices, hiring and onboarding new employees, and addressing any red flags such as safety issues or employee complaints. Here are a few ways your PEO can step into the gap:
- Recruiting– Growing businesses often struggle to find quality candidates because business leaders simply don’t have the time or know-how to recruit effectively. Many PEOs will assist you with sourcing, screening, interviewing, and extending offers to the right people.
- Onboarding– Once you find the right people, you have to bring them up to speed on your culture and company practices. Your PEO will help you formalize the onboarding process not only with paperwork and employee handbooks, but also with training, benefits, and employee self-service technology.
- Better Benefits– Many small businesses are unable to afford the kind of benefits that employees are looking for. With a PEO, you can offer Fortune-500 level benefits based on economy of scale. That can be a major drawing card for candidates, and it can help keep your current employees happy.
- Compliance– Keeping up to date on federal and state compliance guidelines will eat up precious hours every week if you try to manage it alone. Offloading that responsibility to a PEO can give you the freedom to focus on strategic growth activities and customer service.
- Claims Management– As your company grows, your potential for workers compensation claims and insurance claims increases as well. A PEO will help you manage those claims from beginning to end, keeping your employees happy and protecting your business from lawsuits at the same time.
If your business is growing, your HR needs are growing too. Partnering with a PEO is often the best solution for avoiding burnout, reaching your goals, and keeping your business healthy for a bright future.
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