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Small Business Employee Benefits and HR Blog

HR Demands - How to Handle Small Business Human Resources

November 5, 2014
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For small business owners, HR demands can feel like a juggling act. It can be difficult to pull time away from growing the company in order to administer benefits, payroll, and hiring. Not only do these tasks need to be attended to consistently, but it is important that they be compliant with all state and federal regulations.Managing HR Demands

Using a PEO to Handle HR Demands

A solution for many businesses is to hire out their HR demands to a Professional Employer Organization (PEO). PEOs handle a wide array of assignments including onboarding, offboarding, benefits, payroll, paid time off, and workers comp. The primary benefit of a PEO is the workload reduction; however, it is important to note that they assume liability for a business’s compliance with employment laws.

A PEO provides professionally trained HR and compliance expertise while maintaining significant autonomy from the contracting business. They are, in effect, a co-employer who has a stake and a say in how human resources are managed at the company. Trust and collaboration are critical when enrolling in this partnership.

Jeremy Marsan, author and business analyst for Fit Small Business, recently released a guide for determining if a PEO is a good fit for your company.

Could a PEO Help With Your HR Demands?

According to Fit Small Business, the key to determining when to hire a PEO is to conduct a cost-benefit analysis of your current HR demands. Several key components to consider are:

  • How many employees do you currently employ?

  • What benefits do you offer, and what benefits are you looking to provide?

  • How much responsibility are you willing to pass to a third party?

  • How much are you willing to spend on HR management?

If your staff is small enough that an in-house HR rep is unnecessary, but large enough that your HR demands are more than what current administrative employees can handle, then a PEO could be a great solution. According to Fit Small Business, PEOs bring their greatest value when working with a 16 to 40 employee company.

In order to partner with a PEO, the PEO evaluates your finances and occupational hazards, and decides if you are qualified to join and what rate to charge your business. Depending on the services provided, a PEO will charge anywhere from 2% to 11% of your payroll budget.

Alternative Solutions for Managing HR Demands 

According to Fit Small Business, for businesses who are not in a position to inflate their operating budget by that amount, or who are not interested in handing off so much authority, HR management software is an alternative solution.

Cloud-based software for administering benefits, such as ZaneHealth, can be quick to operate, affordable to subscribe to, and can manage plan options so companies remain compliant with IRS regulations.

Not all small businesses have the resources to manage their HR demands in-house. For those business owners, a PEO or benefits software solution may be the optimal allocation of resources.

For more information on how PEOs work and if they are a good fit for your business, read the full Fit Small Business article here.

 

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