Top 6 Ways a PEO Helps You Grow Your Business

February 26th, 2013 by Scott Ingram

grow your business

Many people look at human resources as one of those things you have to do in business. It’s just the way it is. Our clients understand that human resources isn’t just an obligation — which it is to a degree — but when it’s used strategically, it can be a means to unlock opportunities and grow your business. The bottom line is, when you use a PEO, you are being strategic.

Here are six ways a PEO helps you grow your business:

1. PEOs create the freedom for you to focus on your business. PEOs like Servant HR take projects off their clients’ plates. Administrative tasks are the obvious ones. For example, the State of Indiana requires you to report all new hires. This is one of the things that can easily slip through the cracks at businesses in growth mode. When you are focused on building your infrastructure, hiring the best people and moving into new markets, tasks like reporting a new hire can get lost — and get you in trouble. When you have someone else focusing on those things, you can keep growing your business.  There’s no wasted time scrambling to figure what’s required and how to fulfill the requirement. A PEO simply does it, often without our clients even knowing it’s been done. Setting up workers’ compensation is another admin task that often goes overlooked — we just do it.

2. We can help minimize potential attorney fees and wasted time. You probably have an accountant, so when you have an accounting-related question, you call your accountant. In the same way, once business leaders understand their PEO’s areas of involvement, they begin to contact them first when they are dealing with a sensitive HR-related issue.

Going directly to your PEO when you have an issue may help prevent you from wasting money on attorney fees or wasting time researching issues on your own. If we can handle the issue, we will. If we need to work with a client’s attorney to help, we will, and we will have the background information needed to inform our client’s attorney of the issue. In this way, a PEO can help look out for your bottom line.

3. PEOs work strategically with your business goals in mind. Your PEO knows your employee handbook from cover to cover – it probably helped you develop it. And it knows your company philosophy and priorities. When you are dealing with risk issues, such as a discipline challenge, business leaders can turn to their PEO to help them figure out the next steps, and those handbook details and understanding of your business play key roles in how you should strategically respond to risk-laden circumstances. PEOs advise their clients with a full understanding not only of your employee numbers but also an understanding of where you stand financially and other seemingly non-HR matters.

4. PEOs minimize risk. Entrepreneurs recognize the depth and breath of HR today. Healthcare reform helps greatly accentuate that point. All employers are intimately aware of opportunities and threats related to legislation and regulations. If you don’t follow the rules, you could conceivably lose your business in a matter of months. That doesn’t happen often, but it can happen. When you work with a PEO and have a process in place related to payroll, benefits, risk management, workers’ compensation, employee coaching and counseling services, you can keep your eye on the ball in your particular area without worrying about potential penalties or threats related to HR legislation. It’s like using an FDIC-insured bank, as a PEO assumes some of the risk related to HR issues.

Take payroll for example, if you withheld moneys for taxes and didn’t submit them to the government, it’s a federal offense. I’ve seen this happen often. Most of the time, I believe it happens by accident, but there isn’t a risk of this happening when you work with an effective PEO. As another example, you might not know about some FMLA rules that you inadvertently ignored. An employee who bears the brunt of your ignorance might bring a suit against you for failing to comply. A PEO helps take on some of the risk related to these types of issues.

5. A PEO’s process adds value in the eyes of investors. When investors are shopping for opportunities, their due diligence process is thorough. When they see that you work with a PEO, you are demonstrating that you are focused on growing your business (not HR admin tasks) and you don’t have any HR skeletons in your closet. Having a PEO’s input as a third party also can appear as more reliable than information submitted to a potential investor directly from the business seeking funds.

6. Having a PEO in place is impressive for prospective employees. For businesses that want to grow, seeking out and hiring top employees is key. When a potential hire sees that you have health care plans, direct deposit, an employee handbook and other HR-related items in place, they regard you as credible. They can see that you have your house in order as it relates to one of the most important aspects of your business – your people. A PEO helps put that internal structure in place.

If you have questions about how a PEO relationship works, please contact me, Scott Ingram, at 317-585-1688.

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