Labor Costs Too High Hire A PEO
professional employer complicated human resources
organization (PEO) is issues in-house is enough reason
essentially a business to outsource these services.
which offers services such as
human resources, employee To fully understand how a company
benefits, payroll and workers' saves money by outsourcing human
compensation. Companies who take resources related
advantage of such services by responsibilities, it is
outsourcing these tasks enjoy a imperative to consider typical
wealth of advantages including, labor costs. The following is a
most notably, reduced labor list of some of the costs
costs. associated with hiring, retaining
and terminating employees:
In addition to lower labor costs,
these companies also benefit from • Advertising job openings
being free to focus on other • Screening employee candidates
aspects of their business, • Social Security / Medicare
specifically revenue generating taxes
areas. This is possible because • Federal Unemployment taxes
in enlisting the services of a • State Unemployment taxes
PEO, the company receives the • Workers’ compensation insurance
benefit of having an entire staff and administration
of qualified human resources • Administrative overhead
personnel including risk
managers, benefits administrators The majority of these costs do
and payroll specialists. While not vary significantly across
the previously mentioned benefits different types of businesses.
are critical to the success of a However, there are some
business, for many the advantage businesses which experience
of not having to handle increased costs in some areas.
For example, jobs which are highly specialized skills is a
considered high risk such as wise decision. In this scenario,
construction or other forms of finding qualified candidates can
manual labor have higher workers’ be an arduous process and hiring
compensation costs. Another a candidate who is not properly
exception may be increased costs qualified can be costly to the
for advertising and screening company. Rather than risk such a
candidates for positions which costly error it makes sense to
require elevated levels of invest in the services of a
expertise or extensive background professional employer
screenings. Both of these costs organization for assistance in
can be reduced through the use of the process of finding the right
a PEO. While all businesses can candidate at the right time. This
certainly benefit from will not only reduce the amount
outsourcing human resources in of time required of onsite
simplifying a complicated personnel to find and screen
process, those who have elevated candidates but will lessen the
labor costs enjoy financial chances that the chosen candidate
savings through this practice. will leave the company after only
Still another cost savings which a short time due to poor
results from outsourcing human performance.
resources activities is that it
can also lead to increased Workers’ compensation is another
productivity. This article will area in which a company may
offer explanations for these greatly benefit from enlisting
three cost savings benefits. the assistance of a PEO. The cost
associated with workers’
Opting for the assistance of compensation coverage may be
outside experts in fields where relatively low for employers who
qualified candidates must possess have personnel who work in an
office environment but these many smaller companies, there is
costs could increase dramatically not a dedicated human resource
for employers who have employees staff and many of the
working in more dangerous responsibilities are often
situations such as construction. handled by staff members who are
Outsourcing human resources tasks available when tasks need to be
to a PEO can help these companies completed. This is not an ideal
save money on their labor costs situation for a couple of
because the organization may be reasons. First, the staff member
able to negotiate better rates completing the task may not be
for these services. One reason qualified to do so and therefore
these more affordable rates are may not make the most economical
possible is the PEO will have decisions. Additionally, a staff
more experience in this industry member who is inexperienced may
and this greater level of take longer than necessary
experience leads to more resulting in decreased
favorable rates. Additionally, productivity. Not only will the
PEO’s have working relationships staff member have a low
with policy providers. These productivity rate while assuming
business relationships can the responsibilities of a human
translate to better rates for the resources staff member, but he
company if the policy provider will also be spending time away
works closely with the PEO to from his usual responsibilities.
evaluate the situation and
determine the most economical Kristian Svindland, President of
policy. Sales for HROplus, a national
sales brokerage firm representing
Finally, a PEO can result in over 200 PEO’s nationwide,
reduced labor costs for a company explains that while one PEO may
by increasing productivity. In be a great fit for one company it
may not necessarily be a good fit employing a PEO. Some service
for another. Many factors go into providers are able to save a
choosing the correct PEO for each company more than $200 per
individual business such as type employee per year. This can be a
of Industry, location, company significant cost savings for
size, benefits desired and small companies, even more
services required just to name a monumental for larger companies
few. who employ considerably more
employees. Companies both large
Reducing labor costs is one of and small benefit financially
the most noteworthy benefits to from utilizing a PEO.
About the Author:
By Mary V. Stasiewicz sponsored by http://www.hroplus.com/ a PEO: http://www.hroplus.com/ that locates the best Human Resource Outsourcing solution for businesses. Please link to this site when using this article.
Read more articles by: Mary V. Stasiewicz
Article Source: www.iSnare.com |
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