9 Benefits of Outsourcing HR to a PEO

Please note that these sessions are for educational purposes only. TriNet provides HR guidance and best practices. TriNet does not provide legal, tax or accounting advice. The materials in these sessions and the products, advice and opinions expressed in these sessions are solely those prepared by the presenter and not necessarily those of TriNet.

Katrina Faessel:
Working with the right PEO can help you grow your small to medium business. Here to help you learn how a PEO provides assistance so you can reclaim valuable time to focus back on your business are today's presenters, Caroline Agolia and Kaitlyn Campbell, Senior Customer Relationship Managers, TriNet.

Caroline Agolia:
Thank you so much for joining us today. As the business environment continues to change, working with a PEO can help support your needs without draining valuable time from your day. Working with the right PEO can help you grow and get time back to your small to medium-size business. A PEO provides best practice guidance on the ever-changing employment-related rules and regulations and allows your business to stay compliant and stay on top of all the regulatory shifts so that you can focus less on this and more on your business.

Kaitlyn Campbell:
HR processes are extremely time-consuming and time is your greatest asset. SMBs are spending more and more time each year on HR-related tasks, which is why outsourcing HR can be a great way to streamline your business.

Caroline:
There's a ton of benefits of outsourcing HR. As you can imagine, it takes a significant amount of time to manage all HR tasks.

Working with a PEO can help remove those tasks off your plate. It can be very cost effective to help improve your business operations and can also help with compliance related to payroll processing, payroll tax, and employment-related rules and regulations.

Kaitlyn:
You want to make sure that you're outsourcing your HR wisely and compliance is going to be a major factor in that. Employers and HR departments must make sure the business stays compliant, and with a plethora of local, state and federal employment-related requirements, you want to make sure you are aware of what is happening.

Some of you may know that these requirements can change at any time. It really is an ongoing commitment, not something that you can kind of check in on every now and then. You also want to consider a provider who can support you with employee relations. HR departments are typically responsible for handling internal complaints and employee concerns, which can be complex and pretty tricky.

Especially for SMBs, you might not have someone in the dedicated HR role. Having the right partner is going to be really important. Your provider will also need to have strong payroll processing services. A company can't function without payroll. Paying your employees correctly and on time is going to be extremely important. A PEO can help you with payroll processing as well as state and local payroll tax filings.

Caroline:
Compensation for full-time employees often includes various benefits. An outsourcing company might offer businesses access to big company benefits that may have not otherwise been available. Think about all the other benefits you can offer, whether it's health insurance, retirement plans and many other non-traditional offerings. Then let's not forget about workers’ compensation. If an employee is injured on the job, the event must be handled quickly and appropriately. Working with a PEO can help streamline that process for you.

Now let's take a deeper dive into the nine ways your company can benefit from partnering with a PEO.

Kaitlyn:
Outsourcing HR is going to allow you to focus on your core business functions. Although my background is in HR and benefits, and I enjoy it, I know most business owners don't start a company because they're passionate about HR administrative tasks. Especially for SMBs, splitting your attention between daily business needs and administrative tasks can really lead to you falling short on both.

Working with the right partner will get you where you want to go faster. I've personally seen this with my customers, especially those who don't have someone in that designated HR role or maybe it's someone who has multiple hats within the company. They're being pulled away from their core responsibilities to do administration on I9s and collecting data and things of that nature.

Overall, we find that firms that utilize a PEO have 40% better revenue growth than organizations that do not employ a PEO.

Caroline:
Saving money on HR administration costs. While outsourcing HR can come at a cost, it is negligible compared to the value that it brings. As your company grows, your HR department needs to grow with it, but it can be incredibly costly to have that HR department. Working with a PEO gives you access to scalable HR professionals.

Did you know that the annual ROI and cost savings using a PEO is 27.7%? The total average cost savings to outsource HR to a PEO is roughly $1,775 per full time equivalent. So you can imagine the benefits of partnering with a PEO.

Kaitlyn:
You'll also be able to offer employees access to more robust employee benefits. For employees, I would say probably the most, the two most important factors is, how they're being paid and if they have the right benefits. SMBs sometimes don't have access to benefits or employee services. It's hard to recruit and retain top talent when you have other companies that are offering just simply more because they have access to it.

The benefit offering can extend beyond a traditional offering to include EAP programs and discount services. I would say among my customers, it's pretty common to see that people come to TriNet because they have the availability of different plan designs that they normally don't have access to or ancillary benefits that haven't previously been offered simply because the administration behind those are just too much of a burden for the company to take on.

This statistic, 98% of PEO clients reported that their PEO provides them access to benefits that are equal or better than Fortune 500 companies, which is really important when we consider PEOs.

Caroline:
Stronger risk management. It is incredibly hard to stay current with ever-changing employment-related laws at the local, state and federal level. You might have employees in multiple locations, which makes it even more complicated. Now think about it, Covid has changed the way we do business. More and more employers are looking to hire outside of their headquarters’ state.

They're looking to hire a ton of remote workers and they're looking to expand their business nationwide. In order to do that, you need to have strong risk management in place. A PEO can help strengthen that and provide access to HR compliance experts. It can help support not just your organization, but also its employees.

Now, just imagine right now, there are roughly 3,300 new regulations currently under consideration. Most of those are affecting small businesses. Small businesses' regulatory compliance costs are 36% higher than large businesses.

Kaitlyn:
Some PEOs will also be able to provide access to efficient performance management tools. I think most of you can agree that having effective performance management is a good thing, but many SMBs simply don't have the resources for a strong program. Effective employee performance management is truly a critical component of any employer.

However, every employee is different and they respond to feedback very differently. When you hire an HR outsourcing company, you gain access to a variety of performance management tools. This could look like best practice advice for building a program. It could be technology to help support those efforts.

What we have seen is that 78% of employees are eager to take surveys, but half of those have not received any company surveys in the past year. PEOs provide the tools so that customers can use the data to make more informed decisions.

Caroline:
Increased efficiency. One of the most notable benefits of outsourcing HR is the amount of time that you actually save. An in-house HR team has to deal with a countless number of tasks, from HR compliance, to risk mitigation, to employee benefits and payroll processing, and employee inquiries and complaints.

Outsourcing HR helps free up all of that time. Imagine what you could do with that time. Help your HR and your workforce to focus more on advancing your business strategic goals. You want to work with a PEO to give you more time for growing your revenue streams and improving your customer loyalty. Now, 98% of surveyed customers reported considerable or moderate time savings working with TriNet. We have a ton of established departments that can help you in all of these areas, so that way you don't feel alone in this whole process.

Kaitlyn:
With a PEO, you'll also notice a faster ramp up time for new employees. Some PEOs have resources put in place for a seamless and quick onboarding anywhere you need to hire. I know with my customers, they'll reach out to me. They have, especially with Covid, it really changed the landscape for remote work and finding people who could really work anywhere that was the right candidate.

Being with a PEO, you'll be able to have resources so that they have those plans set up for you, that the insurances that you would need for workers’ comp so that you can hire people quickly and efficiently. Sixty-nine percent of employees are more likely to stay with a company for three years or more if they experience a great onboarding.

Caroline:
Now, employee retention is important to organizational efficiency and productivity. Excessive turnover can lead to wasted time and money and effort and expertise. Working with a PEO can give you all of the tools and guidance that you need to foster more of a people-centric workplace. Employees value personal and professional development and working with a PEO can help your employees improve business and software skills.

Employees also incredibly value diversity, equity and inclusion, so why not work with a PEO to help you gain that more people-centric workplace? Eighty-seven percent of workers believe employers should be investing in their continued education and this is up 4% from 2022. Now I can give you some personal experience with regards to my customers.

We have a great learning management system right within our platform and employees have access to this. Not only are these trainings amazing, but they're available to all of our employees across all 50 states that you're looking to hire in.

Kaitlyn:
Caroline, we're going to stop for a question here that just came into the chat. Someone went, and feel free at this point if you have any questions throughout the presentation, feel free to put them in the chat box for those of you who joined late. Caroline, someone asked, if a company has a PEO what does the in-house HR personnel take care of? That's a great question. There is definitely still, and we're going to go over co-employment in a little bit, but with a PEO, we're taking on more of that HR administration. You'll still have someone in-house to help manage your employees, determine compensation, hiring, terminating employees, building a culture, within the company.

We handle more of, like I said, those administrative, payroll processing, regulatory requirements, things of that nature. Caroline, anything to add?

Caroline:
Yeah, and we have some really great tools and resources to help you build out, let's say, policies. Maybe you have just a few policies on hand or you have a handbook that you want to make sure that is compliant.

We have a ton of tools and resources to help you do that. You can select what states you're doing business in and it will literally generate policies for you that then you can take and tweak to your liking. At the end of the day, you know that it's compliant because it's already been vetted. It really just puts you at ease knowing that we have all these tools and resources and we will also guide you through how to successfully use those tools, but we also do have HR staff that you can call at any time. They're available at any time. You would call them with any question, whether it's employee-related, employee relations, compliance-related and also understanding all the rules and regulations nationwide. Every single state is different. I'll say in New York, if you're looking to terminate someone in New York versus California, the rules are very different within those two states.

Our HR team is on standby to help you navigate through all of that. That way, maybe there's a penalty that you might get in that state if you don't take care of it appropriately and we will be able to guide you on all of that.

Kaitlyn:
Thanks and moving forward. All right, so with a PEO, you'll also have access to those expert HR consultants, which is what Caroline was just talking about. Human resources services are complex and dynamic. It's important to make sure personnel have the skills and knowledge to address HR responsibilities in the most effective manner. This is really challenging for some SMBs because they might not have formal background training on HR or managers are really having a heavier lift on employee relations and they simply don't know what they don't know.

They might not have the training to understand some of the basic employment laws and questions they should ask as employee issues come up. So having access to experts to reach out to call, chat with, be able to discuss those situations, those one-offs, on an individual basis to figure out what are the next steps?

Are we asking the right questions? Are we covering all of our bases? What are the risks to the company, if we take some sort of adverse action? Having someone that you can speak with to go over those situations will really be very valuable for any SMB, so much so that 98% of PEO clients would recommend a PEO to a small business colleague.

Caroline:
Getting back time by outsourcing HR. Savings through outsourcing HR can vary greatly and much will depend on how many providers you use and how much administration goes along with that. A multi-provider approach can be useful, but don't forget to factor in all the time that it takes to solicit, to review and then to even compare all the different vendor proposals, not to mention, then think about all the time that it takes to actually manage all of these vendors.

It can be incredibly time-consuming and daunting, especially if you don't really understand the ins and outs of maybe insurance and taxes and payroll. It can get very stressful and you want to make sure that you're looking at the right vendors to help support your business and not every vendor is a great fit.

So to overcome all the multi-provider inefficiencies, a growing number of companies, they're turning to a PEO which can provide them with a single provider integrated solution. That way, you don't have to manage all of these vendors on your own.

Kaitlyn:
We actually got another question in the chat about the PEO model, how it's different from outsourcing HR. Under a PEO, we operate under a co-employment model where your PEO or TriNet would be responsible for certain things like your W-2s tax filings, things like that. Outsourcing HR, there are other solutions that you can outsource, have a consultant come in or have less of the more work within your organization.

They're not really splitting responsibilities in that way. Within the co-employment relationship, we're really taking on those labor-intensive types of tasks, like the tax filings, compliance things, things of that nature. Within that model, though, don't worry, your organization would still maintain control over the workforce.

You hire who you need to hire. You make workforce decisions, compensation, culture, all of those things would still be owned by your organization. We really just take on the heavy lift of those administrative tasks. Several PEOs do operate in this marketplace, but they're far from equal. Everyone is different.

It's important to ask your prospective PEO different types of questions about your needs and the guidance you need and maybe the gaps in your organization that you're looking for help with. So you know exactly who you need to partner with.

Caroline:
Yeah and I'd like to add to, in terms of hiring, let's say an HR consultant, they're really looking at how to improve your internal processes, policies, maybe taking a look at your culture, looking at handbooks. PEO is so much greater than that. It's not just HR, it's the payroll, it's the taxes, it's the benefits. You don't have to think about, oh my goodness, I want to hire someone in Pennsylvania, what benefits am I going to offer them? You don't have to worry about that because we are established in all 50 states.

If you want to hire in a different state, it's not a problem, whether it comes to payroll taxes or the benefits, everything is established for you so that you don't have to think about it, right? If you're only going in-house or you have a multi-vendor provider, it works a little bit differently because you have to think about, oh, I need to register in that particular state. I need to try to figure out benefits in that particular state, but you don't have to worry about that when it comes to a PEO.

Kaitlyn:
Most PEOs, you should say.

Caroline:
Yes, most PEOs. All in all, you want to experience ease when it comes to HR benefits and payroll. Working with TriNet, it is a full-service HR solution. It's an integrated solution so that you can grow and adapt with confidence. You get HR support that sticks with you through it all. You have HR designed for companies of different industries and needs. For example, TriNet, we will tweak your offering depending on what industry you're in to make sure that we're meeting all of your needs. No matter how your business changes, we have the HR expertise to fully support you.

Kaitlyn:
You want to trade complexity for certainty, being able to pick up the phone, call someone and know, hey, this person, they know. They've had this before. They know what I'm trying to do here. They can give me guidance. It's going to definitely help your business. We're going to help you navigate the ins and outs of people with ease and which is why you'd want to partner with TriNet.

Caroline:
Right and take back your time. Who does not want more time? I sure do. Working with TriNet, we not only provide you with HR payroll benefits support, but also you get to utilize our modern technology to help eliminate all of that manual work.

All-in-one HR capabilities, reducing the inefficiencies of working with multiple vendors. Our technology integrates everything, so you can view your payroll, your HR, your benefits all-in-one platform, and you'll also receive responsive support when and how you want it.

So I do want to just personally thank everyone for joining us today. Let us show how our HR experts can help you in this very competitive market. Okay, unfortunately, we're a bit short on time, but you can join us after the next presentation for our Q&A tables, but we do have maybe a few more minutes for another question if anyone has any more questions.

Kaitlyn:
Let me see. There's a couple. Let's try to do a short one.

Caroline:
Like I said, we'll be back after this presentation for more Q&A in case we can't get to everyone.

Kaitlyn:
One person asked about providing a fully managed payroll service. What's included and how does it relate to multi-state compliance? Definitely a couple things going on there. TriNet does have a full payroll service, taking on garnishments, employee deductions, employer deductions, W-2s. There's really quite a list. You can always join us after at one of the roundtables to take a deep dive into your organization and what your specific needs are, but usually when we look at multi-state compliance, there's different final pay requirements.

There's different requirements for maybe sick time, all leave of absences, things like that. A lot can go into payroll when you're operating in different states. That's one of the large benefits of being with a PEO and being with TriNet is that you have someone to help guide you on that.

Caroline:
Yeah, and also not to mention making sure that your taxes are taken out correctly in every single state and making sure that you understand all of the rules and regulations and implications. There's a lot that goes into it. We can go on and on for hours about all the different states, which we unfortunately don't have the time to do. We're fully versed in every state and we have professionals in every single state working under TriNet. We are a nationwide company, so we can certainly help your business expand, especially because it's incredibly competitive, especially post-Covid. Everyone's hiring remotely, so being with a PEO can help you do that to expand your business.

Kaitlyn:
Okay, and Caroline, we have one last question. It says, what is TriNet's pricing structure and which is a wonderful question and a question for our reps that are going to be at the tables after this session. If you could just join that session, we can give you more details on the pricing structure and how you can get a quote from us.

All right. Thanks everyone again.

Caroline:
All right. Thanks everyone. It's been a pleasure.