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PEOs and HR Managers: The Perfect Partnership

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Quick look: Many human resources (HR) professionals, particularly those who work for small businesses, often find themselves in a challenging position. While they play an essential role in driving their company’s success and growth, they are also experiencing high levels of burnout. This leads some to long for a trusted, skillful extra set of hands, and that’s precisely what a professional employer organization (PEO) offers. Discover how in-house HR experts and PEOs can unite to streamline talent acquisition, maintain compliance, manage daily administrative tasks, and more.

Small business HR managers have a lot on their plates: recruiting new hires, finding and administering employee benefits, cultivating a positive workplace environment, keeping the company compliant with fluctuating labor laws, and so much more.

To alleviate these pressures, hundreds of thousands of companies rely on PEOs’ outsourced services to simplify their HR operations—but what does this partnership look like?

PEOs manage various aspects of HR, employee benefits, payroll, risk and compliance, and other employee-related tasks. This support complements, not replaces, a small business’s HR Manager or team, helping them ease their administrative workload and focus more time on big picture initiatives.

If your HR Manager is feeling overwhelmed, partnering with a PEO could be a viable solution. Below, explore how a PEO’s expert team works alongside your existing HR staff to drive success and relieve the strain.

What is the role of a PEO?

When you partner with a PEO, it acts as a co-employer, meaning it assumes certain employer rights, responsibilities, and risk on behalf of your organization.

In co-employment, business leaders maintain control over daily operations and who they hire and terminate. Meanwhile, PEO responsibilities include employment-related tasks and services that HR Managers may not have the capacity to handle themselves, such as benefits administration.

PEO responsibilities

PEOs and HR Managers: a winning combination

The right PEO becomes an extension of your team and has a vested interest in your company’s growth and your employees’ satisfaction. PEOs and HR Managers combine efforts to achieve success in seven major ways:

1. Employee benefits

PEOs offer comprehensive, Fortune 500-level employee benefits at competitive rates that small businesses may not be able to access on their own. Additionally, a PEO’s benefits team helps HR Managers choose the best plans for their unique workforce and takes on the time-consuming administration and management processes.

In addition to standard benefits like health insurance and retirement plans, PEOs may provide access to benefits that appeal to today’s multigenerational talent, like student loan repayment programs, pet insurance, family-forming support, and more.

2. Risk and compliance management

Employment laws are constantly changing, and staying up-to-date and adjusting business practices accordingly is a resource-heavy endeavor for time-crunched HR Managers. PEOs help lighten the load by assisting organizations in creating and maintaining a safe, compliant work environment. This ultimately reduces expenses and the danger of employee-related accidents, lawsuits, and penalties.

3. Payroll and tax administration

One survey revealed that 41% of business owners spend one week or more preparing payroll. By taking over this task, as well as tax administration and time and labor management, if applicable, PEOs can free up HR managers’ time for more strategic initiatives.

Remote work has substantially increased in recent years, complicating tax rates, wage laws, leave policies, and more. This is another area where PEOs can assist, as they may specialize in multistate compliance.

4. Comprehensive guidance and support

What HR Manager couldn’t use a professional sounding board? That’s just what the experts at a PEO can provide, as they help companies create HR roadmaps, develop and update employee handbooks, navigate employee relations, and more.

5. Recruiting

Your organization must hire top talent in order to thrive. A PEO can help you attain this, as some offer a full suite of recruiting services, from assistance in writing job descriptions to support during onboarding. A PEO’s recruitment professionals can also ensure you avoid interview bias and adhere to local pay transparency laws.

6. Learning and development

Education is necessary to keep workforces compliant, engaged, and optimally performing. Through a PEO partnership, HR Managers can provide staff access to a learning and development portal with legally mandated training on topics like harassment and cybersecurity, and lessons on soft and role-specific skills. Additionally, the HR experts at a PEO can assist in developing mentorship programs.

7. Technology adoption

The latest technology enables teams to work more accurately and efficiently, but smaller organizations sometimes lack the time and resources to purchase, learn, and deploy these tools. PEOs are often equipped with cutting-edge platforms that they extend to their customers, from mobile-friendly HR information systems (HRIS) to recruiting applications that harness artificial intelligence (AI) to identify top candidates fairly and efficiently.

Finding the right PEO partner

When PEOs and HR Managers join forces, they can make a significant impact. From recruiting top talent and offering competitive benefits to attract and retain them, to maintaining compliance and leveraging the latest technology, this partnership drives tangible success throughout the employee lifecycle.

A PEO isn’t here to replace your HR Manager—it’s here to empower them. By providing additional resources, expert guidance, and support with complex tasks, a PEO complements your HR team, helping them focus on strategic priorities and drive greater organizational success.

However, not every PEO is the same, as customer support levels, accreditations, and service offerings can vary between providers. For instance, some of the features that set ExtensisHR apart are its:

It’s important to choose a trustworthy partner who can meet your business’s unique needs and help you reach your goals. Explore what makes ExtensisHR stand out, or contact us today to learn more.

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