The Advantages of a PEO for Growing Businesses

When a small business grows, HR functions can become bottlenecks. There are many advantages to working with a PEO for growing businesses, including:

• Increasing efficiency.
• Gaining access to expert support for HR, compliance and risk mitigation.
• Freeing managers and employees to focus on core responsibilities, not HR paperwork.
• Scaling strategically with confidence and agility.

Let's look at how a PEO can transform HR from a roadblock into a launchpad, helping, rather than hindering, an organization's expansion.

The Cost of DIY HR for Small Businesses

Many small businesses grow beyond the point where do-it-yourself HR makes sense. The hidden costs may include:

• Administrative time drain. Founders and key personnel get bogged down in payroll management, benefits administration and other HR concerns.
• Compliance landmines. Regulatory requirements multiply along with headcount and geographic expansion.
• Talent acquisition bottlenecks. A lack of sophisticated recruiting infrastructure slows hiring and onboarding.
• Benefits availability. Smaller companies may face challenges accessing the types of employee benefits typically available to larger organizations, which can impact their ability to compete.

The childhood friends who founded Fairytale Brownies experienced these hidden costs as their dream business took off. Competing in a crowded e-commerce gift market while making and packaging their own products posed challenges in risk mitigation and personnel management.

TriNet’s HR expertise and top-tier technology has helped them grow and deal with their evolving responsibilities as food manufacturers and employers. The company found that PEO services were especially helpful in scaling up for the holidays, when they more than triple their staffing, and then offboarding when the season ends.

PEO as Strategic Growth Provider

A PEO can play a transformative role for small businesses, acting as a strategic trusted advisor as well as an HR outsourcing vendor.

As it works with a company’s operations, it can provide best practice guidance on employment-related law and support on benefits strategy, workforce planning and compliance. A PEO’s expertise and analytics can provide insights small businesses need to navigate complex decisions.

A PEO also offers access to advanced human resource information systems (HRIS), benefits administration and payroll technology. Small businesses can scale their workforce, onboard employees across multiple states and offer access to competitive benefits while shifting resources away from costly internal HR infrastructure towards their business priorities. A PEO's economy of scale means small business experience streamlined processes and higher agility, enhancing cost efficiency.

A PEO shares specific employer responsibilities and assumes certain risks as defined in the client service agreement.

When Do PEOs Deliver Optimal Value?

There are critical growth inflection points when a PEO can deliver the most bang for your buck, such as:

Rapid hiring surges

When a business faces a rapid hiring surge, such as during peak seasons or periods of accelerated growth, PEO address key needs:

• Streamlined talent acquisition processes and candidate pipeline administration.
• Onboarding process automation helps to maintain consistency at scale.
• Payroll administration systems that can handle volume spikes smoothly.

Geographic expansion

Mobile Technologies Inc., which operates in highly competitive, multi-location environments, relies on TriNet's PEO as a scalable HR provider. With TriNet's help, the company grew its US operations in one year from just under 500 to just over 1,600. TriNet helps them with compliance support, access to benefits and workforce needs as they grow across state lines.

PEO's make a world of difference in expansion, with services including:

• Multi-state compliance support.
• Access to localized benefit packages.
• Remote workforce management capabilities.
• Independent contractor payment solution.

Industry pivots and market expansion

Statista America began as a market research and data company and chose TriNet as its PEO provider during a period of rapid growth and geographic expansion.

Statista’s success story reflects the complexities of scaling operations across new locations, requiring robust HR support to support compliance, access to benefits and HR policy expertise as their business model evolved.

Helpful PEO services include:

• Compliance support across different areas.
• Access to benefits to attract diverse talent pools.
• HR policy expertise to align with changing business models.

How PEOs Enable Growth Agility

Let's look at how PEO services help growing businesses to not just outsource HR, but gain a competitive advantage.

Gains in operational efficiency

PEO services drive operational efficiency by taking on crucial but time-consuming HR and administrative tasks. Here are some key ways PEOs enhance efficiency:

• Automated payroll and payroll tax administration. Routine payroll tasks, such as calculations, direct deposits, payroll tax withholdings and year-end tax form generation, are administered by the PEO's technology platform for payroll processed in the platform. This helps to reduce the vulnerability of errors and saves time.
• Benefits administration and optimization. PEOs work with local and national insurance carriers. This can provide smaller businesses with access to premium health, dental and retirement plans that are competitive. Their systems automate employee enrollment, changes and benefits reporting, minimizing paperwork and delays.
• Compliance support. Expert teams stay on top of employment-related laws across jurisdictions. A PEO can assist with reviewing your HR policies and handbook to align with federal, state, and local rules and requirements and helping you mitigate risks.

Talent competitiveness

PEOs can play a crucial role in boosting talent competitiveness for small and mid-sized businesses by providing access to advanced HR tools and offerings that are typically reserved for big enterprises. Here are key ways PEOs foster a competitive talent advantage:

Access to Big-Company Employee Benefits at Small Business Scale

• PEOs offer small businesses access to health, dental, vision, retirement and other insurance plans on par with big companies. This can enhance SMB's recruitment appeal and employee satisfaction.
• Employees may gain access to additional wellness programs, flexible spending accounts and telemedicine services. The PEO offers benefits administration platform to help with open enrollment and compliance reporting, making these high-level benefits accessible and easy.

Professional Development and Retention Programs

• PEOs often provide online learning platforms, access to external training seminars and ways to earn certifications tailored to specific roles or industries. This enables employees to upskill, reskill and grow within the company, which directly supports employee retention and business growth.
• They may offer modular leadership coaching, diversity and inclusion workshops, and compliance courses. These options can be delivered through convenient digital portals, helping shape a culture of continuous improvement and advancement.

Financial optimization

PEOs can be integral to business financial planning as they streamline HR functions and optimized both fixed and variable costs. Here’s how PEO services can help achieve cost efficient outcomes:

Predictable HR Admin Costs That Scale With Revenue

• Because PEOs typically operate on a per-employee or percentage-of-payroll fee structure, HR admin costs become more predictable and directly tied to business size and growth. This allows for firms to budget more accurately and align expenses with actual revenue.

Minimized Reliance on HR Infrastructure Capital Expenditure

• Working with a PEO can lessen the reliance on in-house HR systems, payroll software and benefits administration platforms.
• Businesses may not need to worry about capital expenditures on servers, subscriptions and IT resources, converting what would be large upfront investments into manageable, operational expenses.

Is a PEO Good for a Growing Business?

PEOs can be a major step in strategic planning as your business grows, making HR tasks a breeze. TriNet is a trusted advisor for small and medium-size businesses. We provide an array of HR solutions that respond to the evolving challenges of today’s business environment.

Innovations can include third party integrated tools such as an AI-powered benefits-related tool, an upgraded learning management system, and enhanced mobile onboarding capabilities. TriNet is committed to helping companies not just manage, but truly empower their workforce.

To learn how to use culture, process and data to effectively scale your business, download our free eGuide: Six Key HR Strategies for Scaling Your Business.