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When
an entrepreneur dreams of running a business, that dream seldom includes
spending a quarter of his or her time on such issues as EEOC compliance,
benefits administration, and payroll processing. Yet, according to Nation's
Business and Industry Week, human resources administration and risk management
consume nearly 25% of a company's time.
You probably have an
idea, product or service (possibly your own skills) but you need people or
organizations to help you make the idea a moneymaking reality. This article
will briefly address the basics of finding interested parties.
What's
more, emerging company human resources costs can be 50% higher (and
expenditures per employee nearly 200% greater) than in larger companies.
Clearly, the myriad tasks associated with human resources management can be a
serious distraction for business owners and have a strong negative impact on
growth and profitability.
Given this situation, thousands of companies
have turned to professional employer organizations (PEOs) to manage the human
resources function. The PEO industry is one of the fastest growing in America
(growing by 30% each year), covering close to four million employees in fields
ranging from high-tech to manufacturing to financial services.
How
does a PEO work? PEOs provide an integrated and cost-effective approach to
human resources management through the practice of "co-employment"-
contractually assuming substantial employer responsibilities, and risk.
Companies "share" administrative burdens with the PEO, while retaining all
responsibility for such key business functions as product development,
accounting and financial, distribution, marketing, sales and service.
In partnership with a PEO, employers can:
- Offer their
employees Fortune 500-level benefits, including health, dental, and retirement
plans, at reasonable rates. A competitive benefits package that improves a
company's ability to recruit and retain employees.
- Expand their
businesses and add new employees without an added human resources
administrative burden.
- Create a safer,
more productive workplace.
- Ensure compliance
with the ever-expanding maze of local, state, and federal employment laws and
workplace regulations.
- Focus on revenue
producing activities and customer satisfaction Companies engaging PEO services
have found the transition to be seamless and without disruption for both
management and general employees.
The
first step for any company considering outsourcing its human resources function
is to identify a PEO that will conduct a comprehensive human resources audit.
The audit will assess your company's current human resources practices and
costs, and compare them to what can be offered through a PEO arrangement. More
than likely, business owners will discover that partnering with the PEO would
be highly advantageous, enabling the firm to focus on core competencies, future
growth and profits.
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