Outsourcing Plus In-House HR: Making the Most of a PEO Partnership

All decisions have their pros and cons, and while making employment decisions can be particularly challenging, it’s critical to weigh all your options before pursuing one path or another. One such decision many small and medium-sized businesses must consider is how best to manage administrative tasks so they are poised for sustainable growth. Often leaders think this must mean making an either/or decision: either outsource the HR function or hire an in-house team. Fortunately, it can be a both/and situation, especially when you leverage a PEO partnership.

Have Your Cake and Eat it Too

While an in-house HR team can offer direct control over your human resources functions, including shaping and maintaining the company culture, you may face challenges as your business scales. Hiring and training HR staff and managing the increased complexities that come with a growing organization can stretch resources thin. But this doesn’t mean you have to outsource the entire function. You just need the right partnership for the business to thrive.

Enter a professional employer organization (PEO).

PEOs are third-party outsourcing providers that manage HR, employee benefits, payroll and tax administration, insurance, worker’s compensation and other administrative functions for SMBs. They work alongside your in-house team to manage the day-to-day operations, though in no way do they replace the leadership and decision-making role of business owners and managers. Together, the two teams collaborate on strategic HR matters, however, the ultimate direction of the company remains in the hands of your business.

PEO partnerships offer several benefits to SMBs and their in-house HR teams. One is that 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.

How to Evaluate Whether to Leverage a PEO

If your business has been getting along with an in-house HR team, you may be wondering if you need to partner with a PEO. The decision to partner 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?

These and other questions can help you assess whether your staff and administrative operations may benefit from an outsourced partnership. To learn more about how to maximize your resources so you can grow your SMB, contact us at The OIS Group. We’re here to answer your questions about PEO partnerships and other ways you can optimize business resources. We offer clients a full review free of charge so we can find the right solution for them.