PEO vs. In-House HR: Which is Right for Your Business

Efficiently using resources is the name of the game for SMBs. But when we say resources, we’re not just talking about money. Streamlining operations and optimizing business processes also means outsourcing where appropriate so you can efficiently use everyone’s knowledge and skills.

Because of this, one business area that’s often considered for outsourcing is the HR department. Maintaining an in-house HR team and partnering with a Professional Employer Organization (PEO) both have their merits, but deciding which is right for your business requires careful consideration of various factors. Here are some suggestions to help you determine which might be the best approach for your business needs and goals.

How to Evaluate Whether to Leverage a PEO vs. an In-House HR Solution

The decision between using an in-house HR team and partnering with a PEO is a strategic one that depends on your business’s unique circumstances, goals and resources. Before making the choice, ask yourself these basic questions first.

• How big is your company?
• What are your growth projections?
• Do you have budget constraints?
• Are you concerned about compliance risk?
• Are your benefits packages as good as you’d like them to be?

While an in-house HR team can offer direct control over their human resources functions, including shaping and maintaining the company culture, you may face challenges as your business scales. Hiring and training additional HR staff can be resource-intensive if you need to do so because of the increased workload and complexities that come with a growing workforce.

On the flip side, PEOs are inherently scalable. This makes them an ideal choice for businesses experiencing growth or fluctuations in workforce size. Businesses also benefit from the economies of scale PEOs provide. This is especially true for things like benefits and insurance. A PEO can provide access to cost-effective benefit plans that are on par with Fortune 500-company offerings. Most of these would be otherwise unattainable for small and mid-sized companies.

To learn more about PEOs and whether it’s time to consider one for your SMB, give us a call at The OIS Group. We offer clients a full review free of charge so we can find the right HR solution for them. To learn more, contact us today.