Outsourcing? Here Are Astonishing Reasons Why Small Businesses Should Use PEOs Rather Than Hire Directly

Outsourcing is no secret to both big and small businesses. Everybody’s been into outsourcing these days, even your local bakery; well, they outsource social media management not the “baking.”

Outsourcing promises a lot of benefits; like saving and making more money, and of course the elusive 4-hour work week many entrepreneurs talk about. However, none of these “gurus” told you you have to review a thousand resumes and conduct a hundred interviews before you get the right person.

It’s estimated that by 2020, over 40% of the workforce in the US are going to be freelancers. Corporate jobs attract over 250 resumes on average, but the competition is much tighter in the freelancing realm because of its flexibility.

Aside from that, none of them told you that they needed to hire a new employee each month because their previous employee left 1 month in his/her new job. Lastly, language and culture barrier still happens even if the person you hired speaks perfect English.

There are so many reasons why one would give up on outsourcing, thankfully, PEOs (professional employee organizations) exist and they solve the critical parts of outsourcing that you would not figure out on your first hire.

Less Admin, HR, And Accounting Work.

If you have outsourced before, chances are you heard an applicant ask you about 13th and 14th month pay, healthcare benefits/plan, and work contract. If you are planning to hire employees across Europe for example, it would be time and energy consuming for you to understand the labor laws of each country.

Europe has 24 official languages, with varying culture and labor laws across each border. A PEO with a network across Europe like Bradford Jacobs PEO, lifts this burden off your shoulders.

PEOs offer co-employment, which means you and the PEO are both responsible for the welfare and compensation of your employees. The PEO can take care of all the HR, admin, and accounting-related tasks, so you and your employees can focus on work.

The PEO will take care of the legal requirements and even provide healthcare and government-mandated benefits so your employees can take on a regular, full-time role as they work for you. The PEO will give you a specific quote about your monthly expenses and will also provide you a contract of partnership.

Aside from co-employment, some PEOs also offer flexible employee leasing. This takes the burden of spending too much time on hiring when you only need the employees for a short-term contract.

Higher Retention. Sustained Growth.

As mentioned on the first item, hiring employees directly bring with it a lot of admin and HR-related challenges. And failure to meet employee demands might result to high turnover rate.

Remote employees who are not guaranteed a full time role can easily jump boat should they see another opportunity along the way; especially if someone else gives them a better rate, which by the way, happens often.

According to NAPEO, small businesses who use PEOs have lower turnover rates than those who don’t. It’s because through PEOs these small businesses are able to offer better HR services, retirement plans, healthcare plans, etc. that attracts and retains employees.

A company’s survivability depends on employee management, thus, having higher employee retention means that a company has a dependable workforce that can sustain its growth.

If you are otherwise a startup that has a high employee turnover, your company’s survival can be adversely affected.

Hiring often makes you put your energy in the wrong places and a PEO prevents just that.

Reliable communication. Skilled Employees.

As mentioned earlier, PEOs also offer staff leasing. This means that your leased employees are working in an office where your PEO is based. There’s a small chance of having internet issues and you have one accountable point person for work performance evaluation.

If you’re eyeing to hire full-time a photographer or any skilled worker living abroad, you can ask a PEOs help to find these people. If you don’t have the time to train your employees and wants faster implementation of projects, you can trust that a PEO can provide you the right people you need in a short amount of time.

Takeaway

With a PEO you go on a steadier, less turbulent journey as you outsource. The PEO will help you craft a contract that would make the employment compliant to legal laws. With a PEO, your employees enjoy the benefits that regular, locally- employed full-time employees have.

On the other hand, you as an employer, also free up your time from all the paperwork, avoid the red tape, and retain skilled employees. You and your employees can focus on the more important side of your business, and live in a more harmonious work environment.

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