Is a PEO a Good Fit For My Business?
This is a question we are asked frequently.
The answer is: it depends.
At HR Hawaii, we are a PEO, and while we’d love to say that EVERY business would benefit from partnering with a PEO like us, that’s simply not true. Not every company is a good fit for a PEO, since every company is unique and has different challenges and goals.
The truth is that some companies are better off handling their payroll and administrative tasks internally.
Whether or not a company is a good fit for a PEO depends on a few things:
How Big Is Your Business?
- Does your company have more than 5 employees? Owners of extremely small companies with fewer than 5 employees might be better off managing their own payroll and human resources.
- Is your corporation extremely large? You may already have the in-house capabilities to handle payroll and the buying power to get affordable insurance rates.
Is Your Business Growing?
Growing a business in today’s ultra-competitive economy requires a lot of energy, investment, and most of all, time.
If you find that you’re struggling to find enough time to put into your marketing, operations, and growth strategies, then a PEO might be a good fit for your business.
By outsourcing your HR and payroll functions, you can stop stressing about payroll and comparing insurance plans, etc. and get back to why you started your business in the first place.
You Want To Streamline Your Operation and Cut Costs
By having a PEO manage your payroll, benefits, and HR tasks, you can reduce your internal administrative staff, and eliminate any need for additional in-house payroll or HR staff as your company grows.
Take the cost savings and invest into other areas of your business (like marketing) to maximize growth.
You Want To Attract (and Keep) The Best Employees In Your Industry
Better employees make better businesses. Attracting and hiring the best employees has always been a key part to a successful business operation. If you can’t hire the best workers in your industry, your competitors will.
With Hawaii’s low unemployment rate, it’s becoming even more crucial for businesses to compete for those quality employees.
If you feel like you’ve been scraping the bottom of the barrel when hiring your employees, it could signal that you need to provide a more competitive employee benefits package.
Partnering with a PEO can help your company offer better employee benefits at lower rates, which will help you attract and retain the best talent in your industry.
You Have High Employee Turnover
If you’re in an industry with high turnover, partnering with a PEO can help streamline the hiring and employee training process.
A PEO can provide your employees with custom handbooks to simplify your employee hiring and training process, get them to fill out their new-hire paperwork, and set them up on your company health insurance policies – all without you having to do any work yourself.
So if you have high turnover, a PEO could be a great fit for your needs.
Employment Laws Are Confusing (And Constantly Changing!)
Federal and state employment regulations are ever-changing, and that can make it difficult for most business owners to keep up to date. Fines for noncompliance can be substantial, and a single wrongful termination lawsuit can potentially ruin a small business.
A PEO serves as a shield against any compliance risk your business could face. If you struggle with keeping up to date with your industry, state, and federal regulations, partnering with a PEO is a smart way to avoid these risks.