Once a small business reaches a certain size, they face a dilemma: Do they add more HR staff to handle additional headcount? Even though an energetic HR staff can add considerable value to a business, that role is often seen as a cost center. That is certainly how many CFOs see it.

Once a company recognizes they need to expand HR operations and begin to consider their options, they often find their way to Professional Employer Organizations (PEOs). A PEO can administer virtually all the HR needs of a business and save money on a packaged offering. Such an arrangement can look like a threat to a company’s in-house HR team. But a PEO partnership can actually help HR even more than it helps the CFO.

Even the largest and most buttoned-up PEO needs point people inside the client company to coordinate operations. And a PEO rarely gets involved in company culture activities which greatly influence employee engagement and productivity.

Here’s how a CFO can frame the potential change to their HR team, to calm their concerns and actually inspire their enthusiasm.

Tech to Lighten the Load

Before even considering a change in HR administration, a company may look at technologies to handle routine tasks and increase efficiency. But unless that technology is an integrated human capital management (HCM) system, it can quickly become a maintenance headache for the CFO and more new software than any HR pro wants to tackle.

Nearly all modern PEOs include an HCM with their services. This enables them to remotely and cost-effectively care for clients’ employees and hold down the cost of their services. Such systems automate or expedite HR, payroll, benefits administration, and compliance features.

And, because the various modules interoperate, administrators – both at the PEO and the in-house HR team – can perform all their tasks from a single, intuitive dashboard. Most include employee self-service capabilities which a company’s HR team can leverage to spread company culture and boost employee engagement.

The CFO is saving money on technical support and gaining increased operational efficiency. And HR can look and perform like a top tier national enterprise… because they have the necessary tools.

Taking the Pain Out of Payroll

Payroll tends to get a lot of attention from the CFO. But it’s rarely a concern for HR… unless there’s an issue. If there’s confusion about a withholding, hours recorded versus hours paid, or the pay rate itself, HR usually hears about it first.

As mentioned earlier, a PEO partnership usually includes payroll services. This naturally channels any inquiries about payroll back to the PEO. More importantly, the HCM technology should include time-tracking which both speeds payroll processing and ensures greater accuracy. That means happier employees, which should make HR happier too.

Of course, HR and the CFO have complete visibility into the payroll operations. Secure access to all that data can serve as the basis for regular reports. HCMs usually have robust data analysis and reporting functions. Should the business ever require restructuring, this hard data along with HR’s “soft” insights can inform a more holistic approach to the process.

The Benefits of Lower Benefits Costs

Every HR admin knows one of the most critical factors in recruiting top talent is an attractive benefits package. This is also one of the biggest reasons that companies partner with a PEO. When a PEO manages thousands – or tens of thousands – of employees, they are able to secure enterprise-class benefits at much more affordable rates.

Such benefits can include everything from health, dental, and vision care to retirement products like 401(k)s. In addition to making it easier for in-house HR to recruit the people they need, they are completely relieved of the hassle of managing those programs. The PEO will handle the elections, employee questions, and the actual draws on those benefits.   

However, HR can be as involved as they wish in communicating the programs, in keeping with company culture. The CFO gets the cost savings they’re looking for, and HR takes care of employee engagement. And, since most PEO clients recruit their own personnel, HR’s job of attracting and onboarding new people gets that much easier.  

Performance and Productivity

Perhaps the most sensitive part of an HR professional’s job is the administration of performance reviews. These are entirely under the company’s control. While some PEOs offer consulting on best practices for this critical responsibility, PEOs usually assist only to the extent their HCM software enables the process.

But that software can make a huge difference. It enables 360° reviews from colleagues and managers, enables employee feedback and dialogs, and preserves a record for ongoing reference. HR professionals already know the importance of Performance Management in driving increased productivity and work quality. Having a tool to simplify administration and improve results increases those benefits. 

Such software might fall into the category of “nice-to-have” when a company is growing. Or, that might be the perfect time to implement it. The CFO will get the improved business performance they seek, while HR can utilize their professional skills more than just their administrative ones.

Taking the Heat on Compliance

One of the biggest reasons a company partners with a PEO is to offload a large part of the employer’s liability. These responsibilities can cover everything from the paperwork and filings at hire to managing ongoing insurance coverage at separation. But that doesn’t mean HR is out of the loop.

In fact, depending on the client’s industry, regulatory compliance can include all kinds of workplace procedures and employee education in which HR takes the lead. A good PEO – one that knows the industry – probably already has a lot of these materials and programs. The client’s HR just needs to oversee customization for their company.

But, because the PEO assumes so much liability and may even be supplying the company’s workers’ compensation insurance, they are incentivized to proactively identify risks and assist in mitigating them. CFOs always appreciate the lower risk profile (and the lower insurance rates that can come with it). And, because these programs deeply involve the client’s HR team, HR has the added satisfaction of making a meaningful contribution to the safety and financial well-being of the company and its people.     

Handling the Changes with VensureHR

If your company is growing or needs to reassess the way it handles HR, partnership with a PEO can be just the help you need. In addition to taking a lot of the day-to-day headaches off your plate and lowering costs of benefits and business insurance, a PEO can supply you with the technology you need for maximum HR efficiency.

Most importantly, an experienced PEO can be a strategic partner to help navigate even the most uncertain of times. The CFO will be happy with the decision every quarter, but HR will be happy every day.

If you’re considering a PEO partnership, schedule a no-cost business consultation with VensureHR today. As one of the nation’s largest and fastest-growing PEOs, we can craft a solution that’s perfect for every member of your team.