3 Benefits of Outsourcing HR Functions to a PEO Firm

An HR department performs important duties for the company, such as processing employee payments, medical plans, conducting background checks, and ensuring the company is compliant with current laws. HR professionals often devote a significant amount of time to managing a company’s workforce, from evaluating employee performance to talent development. And yet, they are often bogged down by administrative tasks that prevent them from supporting the company’s strategic goals.  

This is especially true for smaller companies that don’t have the resources to deal with in-house recruiting, which can be costly when HR receives job applicants in high-volume showcasing their credentials. It will reduce the efficiency of their organizational activities like succession planning and maintaining employee relations. That’s why HR professionals need to outsource their peripheral responsibilities to a trusted PEO firm.

1. Automate Employee Benefits and Payrolls

A PEO can set up direct deposit for both salaried and hourly employees. They will make sure vendors and contractors are compensated for their services through one-time payments. As for medical benefits, a PEO provides employees with access to affordable health insurance on par with big companies. This lowers the cost of medical, dental, and vision coverage for your workforce, in terms of available options. 

2. Mitigating the Legal Risks of Enforcing Workplace Regulations

Failing to comply with laws regarding taxes, workers’ rights, and safety standards can lead to serious consequences. A PEO firm will stay on top of your company’s standard operating procedures, along with any employment and labor laws. They provide training to different departments about workplace discrimination, harassment, and safety violations using the employee handbook. The last thing a company needs is an expensive lawsuit filed by disgruntled employees.  

3. Lowers Hiring Costs so HR can Focus on Generating Revenue

These third-party agencies also provide recruiting services to make the hiring process a lot easier. They have automated systems for screening out qualified candidates from a huge database containing hundreds of applicants. PEOs can conduct multiple rounds of interviews for potential hires. In addition, they do proper background checks by pulling up past records of a job seeker and administer a drug screening test as required. 

Outsourcing HR lets busy companies prioritize core business objectives like coaching employers, coordinating capital investments, or designing compensation programs. After all, in-house human resources teams need additional help in order to stay efficient at their jobs. For more information on how outsourcing HR can help your business, contact us at CPEHR and Modern HR.