September 12, 2023

PEOs versus In-House HR: Which is Right For Your Business?

If you’re a small business owner, you already know that one of our goals here at Optimum Employer Solutions is to free up your time so you can spend it generating revenue and focusing on other aspects of your business. The time you can allocate to actually running your business and increasing sales is precious, brought home by the fact that various studies have indicated small businesses owners managing less than 25 employees, can spend up to 40% of their day performing human resources administration and payroll tasks.

So what’s the alternative?

The option for many companies is to hire a professional employer organization (PEO) and outsource non-core activities so business owners can focus on making money and engaging with their employees.

But what’s the difference between a PEO and what can be done in house?

Here are a few key points:

  1. While in-house HR will also have years of experience, PEO specialists have cross-industry experience that allows them to encounter many different types of issues. This insight helps us solve your challenges quicker and gives us a larger toolbox to draw from when approaching any kind of situation.
  2. PEOs specialize in HR, so we budget for continuous training. Our specialists are attending training or webinars on a monthly, if not weekly, basis. We are literally on the cutting edge of new developments.
  3. A PEO provides more protection through co-employment. In-house HR usually cannot shoulder the extra liability for compliance like a PEO can.
  4. PEOs can enhance what in-house HR is doing and put them in more strategic roles to maximize efficiency.
  5. PEOs can often provide an HRIS system that gives companies a customized online portal for employees to access pay stubs, W2s, view PTO balances, etc. This gives the company more prestige and a bigger company feel because these systems are very costly for a small business to purchase.
  6. PEOs can often improve the company’s current benefits package with FSAs, employee assistance programs, and other things the company may not have been able to previously offer staff.

Of course, picking the right PEO is of the utmost importance. Ensure the PEO is reputable, has a service model that matches your company’s needs, and has qualified references.

Let us know if we can help answer your questions!

Published under
HR Outsourcing