Managing a business demands you to oversee multiple tasks at any given time. Fine-tuning your services, overseeing the finances, and managing internal processes can be overwhelming in a small business. Furthermore, maintaining compliance with various laws and regulations requires expertise and knowledge, which means more hiring and growing costs. Hence, it is becoming increasingly important to have a proper HR infrastructure.
However, assembling and managing an HR team is a different challenge altogether. A smarter solution is to partner with a Professional Employment Organization (PEO).
A PEO is a company that manages your HR-related activities, so you can focus on other aspects of the business, viz., revenue generation and global expansion, among other things. As your organization begins to grow, a PEO will be able to handle the rising administrative tasks, establishing productivity and transparency.
Read on to know more about a PEO’s value addition to small businesses.
Why should your small business use a PEO?
Small businesses deal with many short and long-term issues that a PEO platform can better handle. The following points detail their importance:
PEOs help you draft an employee benefits package that covers your workforce’s needs and remains within your budget. With a reasonable amount going towards insurance, social security, and other elements, you can plan your expenses in advance and manage costs. Consequently, you will have a structured expense plan detailing when and where your money is going.
Calculate payroll and taxes accurately
Managing the payroll and taxes of their local and international employees is a major obstacle small companies face. Since various governments have different rates and areas of taxes, it becomes difficult to track all of them.
However, a PEO can handle your yearly payroll, identify the relevant taxes, pay them on time, and generate payslips for the employees. Hence, you will be able to avoid legal hassles and hefty fines.
Calculate workers’ compensation and unemployment costs
Many countries require businesses to pay unemployment costs and offer compensation to their employees during termination. Thanks to their expertise and know-how, PEOs can track and verify such costs. Hence, you can avoid incorrect payments and fines by partnering with a PEO.
Benefits of a PEO for small businesses
A PEO software shoulders the majority of your HR tasks and provides the following benefits:
No internal staff required
The biggest advantage a PEO offers is that you don’t have to assemble a team from scratch to manage internal processes. Developing a team that covers the gamut of a PEO’s services requires a lot of time, money and effort. Furthermore, internal teams have to deal with numerous compliance, legal and accounting challenges. Therefore, it is wise to partner with a PEO that ensures smoother processes and reliability.
Smoother hiring and onboarding
Hiring and onboarding new candidates requires internal professionals to conduct numerous tasks. These include offering contracts, allotting benefits, classifying the employee, adding their details to the payroll system, etc. However, human error can lead to miscalculations and other problems, which can be detrimental to your business. Partnering with a PEO ensures expert help, reliable processes, and faster results.
Seamless payroll management
You need in-depth knowledge of various laws and regulations to maintain the payroll of your global employees. Inaccuracies in payroll often lead to fines and legal matters, harming your image. A PEO can manage the payroll of your entire organization, identify the relevant taxes you have to pay, and ensure on-time payments without hassles. The utility of a PEO amplifies as your team grows over time.
Plan a fulfilling employee benefits package
Many countries mandate businesses to offer their employees a set of benefits (insurance, social security, vocational training, etc.) in addition to their salaries. Planning a benefits program can be time-consuming, unless you partner with a PEO. With expert help and customization at the core of a PEO, you can offer tailored benefits to your employees. This will lead to both cost savings and lesser employee turnover.
Zero compliance issues
Navigating the complex laws and regulations of various countries can be overwhelming. Seeking help from an external agency in such matters can be expensive. On the other hand, a PEO platform will help you align with the local labor laws and avoid any potential lawsuits for your company.
PEO services for small businesses
PEOs offer various services that simplify numerous internal processes and promote a better working environment. These include:
PEOs are responsible for seamless and punctual payroll processes relevant to all global and local regulations. Depending on their services, they will help you avoid possible unpaid taxes, penalties, and other payments. Furthermore, PEOs help you draft a suitable benefits package to offer your new employees. At the end of the day, you can overview all your future costs and manage them accordingly.
An important part of smoother employee onboarding is introducing them to the company’s ethics and procedures. PEOs prepare and distribute company handbooks to new employees to reduce internal conflicts and confusion. Consequently, the employee will quickly adapt to your work culture and feel comfortable in the workspace.
You must possess a dedicated team with complete knowledge of internal processes to deal with employee complaints. However, PEOs are adept at handling such matters as they conduct investigations and advise the next steps. You can depend on their services to ensure appropriate management and lawful resolutions of such situations.
Adherence to local and global laws
A PEO provider helps you keep up with the fickle and complicated labor laws. Their compliance experts ensure you are not skipping any relevant employment regulations. Partner with a PEO to stay aware of global and domestic taxation policies, mandatory employee benefits, unemployment insurance, disability laws, etc.
How a PEO can help small businesses grow
As a business owner, you are already wearing too many hats. When your business gradually scales up, the responsibilities grow and it becomes difficult to manage multiple roles. Expanding team size, complicated HR procedures, cash flow management, introducing new infrastructure to support the business, and adapting to the technology needs are a few of the challenges you will face.
According to a study, small businesses using PEO have experienced the following:
- 7-9% faster progress
- 10-14% lesser employee turnover
- 50% less likely to stop operations
The aforementioned benefits and statistics establish the importance of partnering with a PEO. Since a small business will not have enough time and resources to oversee various departments, it is cost-effective and viable to avail PEO service to scale your business for the future.
Choose Multiplier for your small business PEO requirements
It is important to have in-depth knowledge of HR and process-oriented internal systems. However, small businesses usually deal with numerous challenges on these fronts due to a lack of expert help.
Multiplier’s PEO software helps you onboard and manage your global employees without registering multiple entities and developing internal departments. Our platform allows you to release payroll compliantly, on time and in local currency in 150+ countries. Furthermore, thanks to our expert legal team, you will be on top of all the relevant labor laws.
To accelerate your business growth and streamline internal processes, choose our PEO services.