HR Essentials HR Outsourcing

How a PEO Helps Create Scalable HR Infrastructure for Growing Companies

March 17, 2022

Businesses experiencing a surge in growth are faced with exciting opportunities. They’re able to grow their workforce, expand services, develop new products and add new locations. However, without the proper support and scalability, these opportunities can create added stress and responsibilities for business owners. Small to medium-size businesses (SMBs) need to be scalable in order to support their long-term goals and grow their company. Unfortunately, without the necessary HR infrastructure, scalability can be difficult. In an effort to maintain your organization’s culture, comply with ongoing regulations and compliance-related hurdles, and improve talent recruitment and retention, a professional employer organization (PEO) is instrumental. To better understand the importance of this relationship, here’s how a PEO can help create scalable HR infrastructure for growing SMBs.

The Importance of HR Infrastructure for Company Growth

The more employees your company has, the more HR support you need. Not scaling your HR infrastructure accordingly can lead to problems with your long-term growth, especially in regard to processing necessary paperwork and employee support. At a certain point, this growth may require you to focus on hiring internal HR experts, which can detract from growing other important segments of your workforce.

A PEO helps you save time and resources by providing HR support that can be easily scaled as your company grows. This helps SMBs focus on the tasks that your company needs to complete to be successful, while decreasing the likelihood of long-term problems like shutdowns or bankruptcy in uncertain times. Consider the impact of the pandemic on SMBs who had support versus those who did not. A study by the National Association of Professional Employer Organizations found that since the pandemic, businesses who partnered with PEOs were 58% less likely to permanently close than comparable small businesses without support.1 When you’re looking to solidify your company’s long-term growth and success, partnering with a PEO is a great way to support your journey.

Scalability Benefits of Working with a PEO

SMBs who partner with a PEO have more long-term stability, especially in uncertain times. However, there are several different benefits of working with a PEO. When considering growth, PEOs are an efficient way to enable your company with a scalable HR infrastructure that can support your growing workforce. Here are some of the most notable ways a PEO can support the expansion of your SMB.

Resources for Talent Recruitment

When you’re looking to grow, working with a PEO can provide you with the resources necessary for top-talent recruitment.HR experts can help with best practices for screening, interviewing and even extending offers.

With access to HR experts, you can improve your ability to manage the hiring process efficiently while increasing your company’s attractiveness to prospective hires. Since skilled candidates are often provided with plenty of attractive offers, perfecting your application and interview process will give you better access to employees who can help strengthen your company’s short and long-term goals.

Despite the pandemic, between March and September 2021, those partnering with a PEO have had a rate of employment growth that is 81% higher relative to comparable small businesses.2 Company growth requires the strategic expansion of your workforce, which is better with a PEO.

Stronger Onboarding Experience

After interviewing candidates, you’ll be faced with a selective pool of potential hires. Those who accept your offer will need to progress through onboarding to be oriented into your company and gain a stronger understanding of their role. Onboarding will include an introduction into your company culture, expectations, benefits, payroll and other important HR features. By utilizing a PEO, you’ll formalize the overall onboarding process and strengthen employee experience for incoming staff.

When onboarding is confusing, disorganized or too minimal, new employees may begin to doubt their decision to join your company. This doubt can lead to withdrawing their application and instead, working for a competitor. PEOs can help you create a more seamless experience without increasing your overall workload. This includes guided assistance to integrate into your company in a simple, yet organized manner. Strong first impressions tend to create more satisfied employees, which is why implementing a positive onboarding experience is so important.

Ongoing Talent Retention

Once new hires have been trained and onboarded, your job isn’t over. Keeping your employees happy and positioned to grow is integral to the long-term success and expansion of your SMB. Working with a PEO improves your ability to build productive, effective teams by integrating performance management tools that capture real-time feedback and builds open communication. In fact, SMBs who partner with a PEO tend to have a 10% to 14% lower turnover rate than those without outsourced support.3

Investing in your employee experience and ongoing development can show returns toward improving talent retention. Many PEOs offer resources that allow your employees to continue performing at their best. This includes access to professional courses, modules and training across various fields. When you invest in your employees, they’ll be more likely to grow within your company and less likely to seek outside opportunities. Leaders who are built from within are dedicated to the success and ongoing growth of their company, which helps you fuel your expansion and motivate your workforce. By offering career transition support, you’ll demonstrate a commitment to your team.

Consistency Across HR Professionals

Working with an internal HR team increases your risk for discontinuity if there’s turnover. Many HR professionals work differently and when you utilize a small team without consistent standards, it can create confusing situations for employees. It’s impossible to guarantee that internal HR employees will stay in their roles for years, but a PEO can provide consistency across your entire organization, especially during periods of growth. This is especially important if your company is trying to appeal to prospective buyers or investors.

Access to Big-Company Benefits

Small to medium-size businesses don’t always have the resources to provide their employees with the same benefits as larger companies. This can make it difficult to hire and retain industry-leading talent. When you partner with a PEO, you’ll gain access to these big-company benefits that help increase the appeal to candidates. Comprehensive benefits packages include access to top insurance carriers with great options for spouses and pets, along with plenty of employee perks. You’ll be better equipped to offer traditional health benefits and retirement coverage in addition to additional options like illness policies, access to home and auto policies, commuter benefits and more.

PEOs use the collective strength of all of the SMBs they partner with to access benefits that many big companies give their employees. These benefits include access to health, dental, vision and retirement plans offered through industry leaders. By providing your workforce with attractive packages, you’ll improve overall employee experience and increase your retention of top talent.

Risk Mitigation and Compliance

Bigger companies are at greater risk for compliance issues and trying to stay on top of the guidelines and associated updates could easily take enough time to fill a full workweek. When you outsource your HR infrastructure, you’ll reap the benefits of risk mitigation and compliance help. Using industry-specialized, best-practices guidance on employment-related rules and regulations, a vertical specific PEO can help you mitigate risk while making informed decisions that can help you stay on track whenever difficult or sensitive situations arise.

As your business continues to grow, make sure you’re properly supported with a scalable solution that combines a team of HR professionals with comprehensive technology platform. By partnering with a PEO like TriNet, you’ll gain access to best practices in strategic recruitment strategies, efficient onboarding, big-company benefits, risk mitigation services and more.

1 NAPEO, “PEO Clients in the COVID-19 Pandemic: Follow-Up Analysis,” (2021). Individual results may vary.
2 Ibid. Individual results may vary.
3 NAPEO, “The PEO Industry Footprint in 2021,” (2021). Individual results may vary.

By TriNet Team

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