The Business Case for HR Outsourcing

HR Outsource Solutions

There are many reasons a business would consider partnering with a PEO. But you know that. In fact, you’re already sold on the concept and want to find out how much an HR outsource solution would cost or save your company. Before you begin though, you want to get buy-in from upper management or the rest of your team. You want to propose a brief but convincing business case for HR outsourcing.

No problem!

Below you will find details that will help you present a business case for HR outsourcing to a PEO sorted by business need. Most likely, your business has more than one need.

Business Case for HR Outsourcing: Attract Better Employees

PEO Solution: Create an HR infrastructure that rivals that of larger corporations and enhances your benefit offerings.

Benefit: When your company offers employees a structured HR set up, you exude an air of professionalism typically seen in much larger companies. From the interview process to onboarding and throughout the employee lifecycle, your candidates will know you mean business. By partnering with a PEO, you will gain group buying power for things like health, dental, vision, workers’ compensation, and short and long-term disability insurances. You will work with A-rated carriers and offer a benefits package to attract the top talent in your industry.

Why it matters: Great employees make great workplaces. They enhance productivity and customer satisfaction.

Business Case for HR Outsourcing: Ensure Compliance

PEO Solution: Implement policies and procedures conducive to local, state and federal employment laws.

Benefit: When you partner with a PEO, they share employment law liability with you. Their HR experts ensure your business is compliant with employment law. They begin by creating or updating your current employee handbook. Then, your HR experts will roll out the handbook and any new policies or procedures to your employees. They will guide your managers to handle any employee issues appropriately and following the law.

Why it matters: Non-compliance with employment law can prove devastating to a company’s bottom line, especially for small or mid-sized companies.


Business Case for HR Outsourcing: Process Accurate Payroll

PEO Solution: Allow certified payroll experts handle all of your payroll processing, payroll tax submitting and W-2 creation and distribution.

Benefit: The benefit of partnering with a PEO is that they have certified payroll experts on staff. Payroll is their passion. It’s not just a random task they are assigned because no one else has the time to do it. These experts spend countless hours processing payroll and make it their business to know the latest laws and trends.

Additionally, if your PEO is IRS certified (or a CPEO), you have the bonus of handing overall tax liability once you submit your payroll dollars to the CPEO. From that point on, the CPEO is responsible for filing your payroll taxes on time and correctly. You will not receive the penalty if not done so.

Why it matters: Payroll tasks can be a time suck for your staff when it isn’t their expertise. Submitting the correct payroll taxes and deducting proper amounts from each paycheck is essential to avoid penalties and angry employees.

Business Case for HR Outsourcing: Access Affordable Benefits

PEO Solution: Join various insurance pools with other employee groups to access better pricing due to professional claims management and economies of scale.

Benefit: One significant advantage of the PEO relationship is the buying power you can use to access more affordable benefits. PEOs can maintain lower premiums by effectively managing claims, offering your employees benefits assistance and joining many employer groups together under one FEIN. Not only does this apply to health insurance, but also includes things like vision insurance, dental insurance, long and short-term disability insurance, workers’ compensation and unemployment insurance rates.

Why it matters: Healthcare insurance for smaller companies is expensive. Control costs by being a part of a larger group. You may be able to offer more benefits to enhance your total compensation packages.

Business Case for HR Outsourcing: Increase Safety in the Workplace

PEO Solution: Implement a risk and safety program that satisfies all industry requirements and ultimately provides the safest work environment for

Benefit: A safe work environment translates to lower workers’ compensation insurance rates, more productivity and less downtime.

Why it matters: Personal safety is a basic employee need. Employers should be able to provide a safe work environment for everyone and have practices in place for any potential risks.

Business Case for HR Outsourcing: Lower Unemployment Tax Rate

PEO Solution: Train managers how to terminate non-productive employees the right way and fight un-necessary unemployment claims.

Benefit: Your managers will practice compliant terminations when necessary. Additionally, you will have a team of HR experts available to fight un-necessary claims on your behalf. You benefit from lower unemployment insurance tax rates.

Why it matters: We’re sure you have more impactful ways to spend your hard-earned dollars than paying high unemployment taxes.

Business Case for HR Outsourcing: Geographical Expansion

PEO Solution: Your business is growing, and you would like to expand to other states or regions. One set of local and state employment laws and tax rates seems daunting enough. Now you need to think about multiple ones. A PEO has the capabilities to handle these nuances to keep you compliant with employment laws, minimum wage amounts, tax rates, and other requirements that vary by location.

Benefit: You don’t need to keep up with multiple laws, rates and other requirements. Your HR experts will guide you and ensure you know everything you need to know to make the right strategic organizational decisions when it comes to your human resources.

Value: Take as much worry and frustration out of this exciting time of company growth as possible. Get the help you need to grow while remaining compliant.


Next Steps

While these business needs are the most common that we encounter, we realize that every company has a unique set of needs. If you have business needs not addressed here, or you would like assistance in creating a business case for HR outsourcing, we are here to support you.

Fill out the form below and we’ll contact you shortly to discuss your organization’s unique needs.

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