Many small businesses choose to keep their payroll operations in house. However, there may come a time when it makes sense to outsource this aspect of your operations. As your business grows, you may find that your payroll becomes too complex and/or time consuming to keep in house. Even if your team is equipped to handle this task, you may simply find that the time spent on payroll would be more beneficial to your business if it were focused on other areas of your operations.
Regardless of the reason, if you’re looking to outsource the management of your payroll, you have several options. The two most common solutions are to hire a payroll company or work with a professional employer organization (PEO). While both options can deliver the payroll support you need, there are a few key differences that typically make a PEO company a better choice for small businesses.
A payroll company is a third-party provider that handles a variety of services associated with managing the payroll needs of your business to ensure your employees are paid correctly and on time. This includes:
A PEO company handles all of the payroll services discussed above, but they can also assist your business with a wide range of other HR matters. In addition to managing your payroll, a PEO company can handle:
You’ll experience a variety of benefits when you choose a PEO company to manage your payroll instead of a dedicated payroll company. One of the biggest advantages is that a PEO company is able to provide you with much more robust services. In addition to handling the management of your payroll, you’ll be able to outsource all of the HR services discussed above when you work with a PEO company. This can free up a significant amount of time and resources, allowing your team to focus on other areas of your business that are more critical to be handled in house.
Employment laws and regulations can be difficult to navigate, especially if your business doesn’t have a dedicated HR team. PEO companies are highly knowledgeable about employment laws, benefits and other HR-related matters, and they can provide important HR consulting services that ensure your business will remain compliant with all state and federal regulations. This compliance support can help prevent costly fines and legal issues that may occur if your team doesn’t stay abreast of the changes in HR regulations over time.
When you work with a PEO company, you’ll also have access to a wider range of benefits. Most small businesses lack the bargaining power to negotiate the best rates for the benefits they provide for their employees. PEO companies often have access to group rates with insurance companies, which allows them to offer your business a variety of benefits options at discount rates that wouldn’t otherwise be available to you. These discounted rates can save your business a significant amount of money each year.
Finally, a PEO company can help you develop employee engagement programs that will enable you to maintain a strong work culture that retains your best employees and attracts top talent when you have open positions. The COVID-19 pandemic has created new and previously unforeseen employee engagement challenges, making it more important than ever to cultivate a strong culture at your business. PEO companies have extensive experience working with a wide range of companies with very different cultures, and they can help your business navigate these challenges to ensure you foster a positive working environment that sets your team up for ongoing success.
PassioHR is a full service PEO company that can manage your payroll and address a wide range of other HR needs for your business. Whether you need assistance with employee engagement matters, recruiting and hiring, or choosing the right benefits packages to offer your employees, we’ve got you covered. In addition, our HR compliance experts will give you peace of mind that your business will remain up to date on the latest changes in HR laws and regulations.
Our Elevated Engagement Plus™ Approach ensures your needs are addressed at all times. As part of this approach, we’ll engage your team in a thorough discovery process that helps us to understand your unique company culture and workforce dynamic. This allows us to recommend the right solutions to address the specific needs of your business. When you work with PassioHR, you’ll have much more than a dedicated payroll service provider. You’ll benefit from our extensive HR expertise, ensuring all tasks associated with this important aspect of your operations are handled smoothly.
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