Why Payroll Outsourcing is so Popular

Large companies tend to keep human resources functions in-house. Payroll, training, human resources administration, benefits programs and labor law compliance are all covered by dedicated staff in the company’s HR department. This is an expensive undertaking; well within the budget of a big company, but for small and medium-sized businesses, the costs of doing everything themselves can be prohibitive. Paying for an office manager or bookkeeper to run the back office functions of a three-person operation is one thing, but when a company grows, the demands of staff, management, customers and regulatory bodies quickly become overwhelming. Trying to upgrade to a fully capable HR department is expensive, time-consuming and distracting to the company leadership when operations should be the focus.

PEO (Professional Employer Organization) firms offer the ideal solution for many growing businesses. Instead of recruiting and paying salaries and benefits to multiple professionals, buying new computer hardware and software and renting additional office space to house the department and its equipment, partnering with a PEO firm lets a growing company take advantage of the capabilities of payroll experts without the huge investment. The company quickly gets the full HR capabilities that much bigger companies enjoy at a fraction of the cost.

A reputable PEO firm can quickly step in and take over all aspects of payroll services for a business, including administration, online payroll entry, paycard and self-service capability for employees and even time and attendance functions, with job costing, HR policy enforcement and on-demand reporting for management. PEO firms offer far more services than just payroll, though. They have the staff, the tools and the expertise to take on other demanding tasks that become increasingly important (and time-consuming) as companies grow. They can take over the administration of the Workers’ Compensation program, including safety training, audit and compliance, payment of premiums, certificates of insurance and injury claim administration. They also help a company to navigate the hundreds of regulations and labor laws that may be applicable, undertaking audits to determine if the company is in violation of any laws, then helping to address those issues.

When a small to medium-sized business is in a position of strong growth, partnering with a PEO services firm is more important than ever. While the business and its employees will benefit from improvements brought by payroll outsourcing companies, there are other areas where HR expertise is critical as well. Management needs to focus on its core competencies: running production, negotiating deals and pursuing strategic opportunities. Back office distractions are not something a company’s leadership should be dealing with at these times. Growth can’t happen if the production and sales workforce doesn’t expand, and this is another key area where a PEO firm is invaluable. PEO companies provide professional recruiting, interviewing, salary negotiations and background screening, ensuring only the highest quality, best-fit employees are hired.

If you have questions or would like more information about the topics discussed in this article, please contact our HR Department by clicking here. Please be sure to reference the title of the article in your inquiry.

This article was sponsored by National PEO, LLC. National PEO is a leading provider of PEO services to hundreds of companies all over the US. Let us handle the burden of Payroll Services, Benefits Administration, Worker’s Comp, and Human Resources for your company. Contact us today to request a quote!

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