The Strategic Advantage of PEOs for Small Businesses
Find out why hiring a PEO for small businesses is a strategic move. Learn how it can help streamline HR tasks, reduce costs, and foster business...
Discover real success stories from companies who outsourced HR to a PEO to help grow their business through expertise and cost savings.
Boost Your Business Growth with Outsourced HR [Real Stories and Testimonials Included]
One crucial aspect that plays a pivotal role in driving business success is human resources (HR). However, managing HR functions in-house can be a time-consuming and resource-intensive task. That's where HR outsourcing comes into play.
You can outsource HR through three main service providers:
- Professional Employer Organization (PEO): A PEO is a company that provides comprehensive HR outsourcing services to small and medium-sized businesses. When a company partners with a PEO, it enters a co-employment relationship where the PEO becomes the employer of record for certain employment-related purposes. The PEO then handles various HR functions, such as payroll processing, benefits administration, workers' compensation, HR compliance, risk management, and more. The client company retains control over its operations, while the PEO takes care of HR-related tasks and assumes certain liabilities.
- Administrative Services Organization (ASO): An ASO is like a PEO in that it offers HR outsourcing services, but it does not enter a co-employment relationship. While ASOs typically assist with tasks like payroll, benefits administration, HR compliance, and risk management, the client company remains the employer of record and, therefore, maintains all employer-related liabilities.
- Business Process Outsourcing (BPO): BPO refers to the practice of contracting specific business processes or operations to a third-party service provider. Unlike PEOs and ASOs that primarily focus on HR functions, BPOs encompass a broader range of business processes across various departments beyond HR, including finance, accounting, customer service, IT support, data entry, supply chain management, and more.
For this blog, we’ll be focused on PEOs, the most popular and comprehensive option, and explore how outsourced HR can help grow your business.
You can read more about the types of outsourced HR providers here.
Benefits of Outsourced HR for Your Business Growth
There are many outsourced HR tasks that can be delegated and offloaded to a PEO to help your business, such as onboarding paperwork, open enrollment, compliance, payroll, claims management, workers' compensation, benefits administration, tax administration, and more.
These HR outsourcing services offer several advantages that can propel your business toward accelerated growth, such as:
- Cost Savings and Scalability: By outsourcing HR functions, companies can save money and significantly reduce overhead costs associated with hiring and maintaining an in-house HR team. Moreover, outsourced HR services offer flexible staffing options, allowing businesses to scale up or down based on their specific needs.
- Expertise and Efficiency: Outsourcing HR grants you access to a team of experienced HR professionals with specialized knowledge and expertise in human resources. This ensures that your HR processes are handled efficiently and effectively, minimizing errors and maximizing productivity.
- Focus on Core Business Functions: By delegating HR responsibilities to a trusted outsourcing partner, your internal teams can concentrate on core business functions and strategic initiatives. This shift in focus allows for increased productivity and profitability, as your employees can channel their energy toward driving growth and innovation.
How Outsourced HR Can Support Your Business Expansion
As your business continues to grow, outsourcing HR to a PEO can offer invaluable support to help you minimize growing pains in the following areas:
- Onboarding: Outsourcing HR helps streamline your onboarding processes to create efficiencies. The PEO provides professional HR software for employees to complete all legal paperwork, helps with background checks, manages benefits enrollments and administration, and offers ongoing HR support to enhance employee engagement and productivity from day one.
- Employee Development and Engagement: Many HR service providers offer customized training and development programs that empower your workforce with the necessary skills and knowledge to excel in their roles. They may also implement performance management systems and feedback mechanisms to foster a culture of continuous improvement, engagement, and high performance.
- Compliance and Risk Management: Keeping up with ever-changing labor laws and regulations can be a daunting task, especially as your company crosses new thresholds of employment law regulations due to its growth. Using outsourced HR services ensures that your company remains compliant while minimizing legal risks and potential penalties. The PEO’s expertise provides best practices, helps you keep employee handbooks up-to-date, and ensures you stay ahead of compliance requirements.
According to NAPEO, partnering with a Professional Employer Organization (PEO) can accelerate business growth by 7-9%. By partnering with a PEO, your business can shift its focus from HR administrative tasks to activities that drive growth, such as product development, marketing, and sales.
Outsourced HR with a PEO: Real-Life Success Stories
As you can see, outsourcing HR to a PEO offers many benefits to businesses looking to grow. Let’s take a look at some real-life client success stories.
Please Note: We provide limited identifiable information to protect and respect our clients’ privacy.
How a Trade Association Leveraged Outsourced HR for Cost Savings and Business Success
A trade association in the life science industry faced resource limitations in handling HR functions internally. To address this, they partnered with Stratus HR, a PEO that provides cost-effective HR solutions.
Stratus handled personnel issues, HR paperwork, benefits administration, and payroll, relieving the association of the administrative burden so they could focus on core business activities. The partnership resulted in streamlined operations, cost savings, and access to enterprise-level healthcare benefits.
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"The ability to offload these responsibilities to Stratus and trust that everything is being managed properly, that they stay up-to-date with laws and regulations, and keep us informed on what needs to be done – it's truly invaluable. If we were to hire someone to do what they do as in-house HR staff, even on a part-time basis, we would likely be paying tens of thousands of dollars a year. So, it represents significant cost savings for us.” President & CEO, Stratus HR client |
How Outsourced HR Helped a Growing Manufacturing Company Navigate Workforce Changes
A manufacturing company that specializes in producing high-quality silencers for hunters and gun enthusiasts needed to adapt to changing market conditions. As a result, they sought a flexible HR solution that could provide payroll accuracy, compliance assistance, and cost-effective health packages.
After careful consideration, they chose Stratus as their HR partner and resource, benefiting from accurate payroll, timely compliance, bulk-buying savings on healthcare packages, and the convenience of an on-demand HR resource. With Stratus, the company effectively operates with a smaller HR staff while receiving excellent customer service and expertise in various HR areas. Stratus's commitment to service sets them apart from competitors, providing a competitive advantage in the market.
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“The Stratus team is awesome. Their responsiveness and follow-up are outstanding. They understand what’s important to us, where we’re going as an organization, and what our strategic roadmap is. They offer help, services, and expertise with issues they’ve seen to be successful with their other clients. Success in this relationship is all about that service model. I think that’s an area where Stratus shines.” Head of HR, Stratus HR client |
Read more about this client’s story here.
How Outsourced HR Supports Seamless Growth and Acquisitions
An expanding asset recovery company relies on Stratus HR to provide HR services for its offices across the country. Outsourcing to Stratus has afforded them a full-time HR department at a fraction of the cost.
Stratus has been instrumental in the company's growth through acquisitions by integrating their HRIS (Human Resource Information System) across all new companies, which “makes life easy” for hiring, employee management, payroll, and more.
In the three years that their VP of HR has worked at the company with Stratus, they’ve grown by more than 600% with employees now working in various parts of the world. And, specializing in the recovery of equipment and money, together they’ve been responsible for more than one billion dollars in resolved client assets.
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“Whenever we acquire a new company, the biggest challenge is always whether payroll and benefits match up. We don't want the new employees to suffer at all because of the acquisition. The great thing is that Stratus does all that work for us, particularly around benefits. We’ve been able to leverage their tools and get the most out of them. Their team has been very accommodating in any request we’ve made and in making sure that we can do what we need to do. If anybody asks me, I’ll speak very highly of Stratus because I’ve really seen the value in what they provide.” VP of HR, Stratus HR client |
Read more about this client’s story here.
Outsource HR to a PEO to Drive Your Business Growth
Outsourcing HR to a PEO has the potential to help you grow your business.
As you set out on your path to expansion, integrating outsourced HR into your business strategy enables you to attract top-tier talent, foster engaged employees, and efficiently handle compliance and risks. By leveraging a range of outsourced HR services, you can realize financial benefits such as cost savings, tap into specialized expertise, and reclaim valuable time to concentrate on core business functions.
Take advantage of the game-changing benefits that outsourcing your HR to a PEO can offer as you drive your business forward. To learn more about outsourcing your HR functions and what Stratus can do for your business, reach out for a consultation.