5 Reasons to Outsource HR | WorkSmart Systems is a Professional Employer Organization (PEO)


5 Reasons to Outsource HR


HR outsourcing is becoming a top industry trend with almost 85 percent of organizations outsourcing some or all of their HR needs to Professional Employer Organizations (PEOs).  A PEO enables clients to cost-effectively outsource human resources, payroll, employee benefits, and payroll tax compliance. Now more than ever, businesses need help managing human resources tasks. Many turn to a skilled and knowledgeable PEO to effectively integrate services and manage employee administration.

By partnering with a PEO, companies can reduce their costs, improve compliance, have consistent health care reform support, benefit from new services and focus more on core business functions. Here are five reasons companies excel, grow and improve in new and efficient ways when they partner with a PEO:

  1. Reduce Costs & Eliminate the Need for a Full HR staff

Fifty-six percent of companies decide to work with outside HR companies to save money and/or reduce operating costs. A PEO can efficiently handle your HR needs with a complete HR department at much less cost than a typical company’s in-house HR staff. They can also assess the client company to see where HR and health care related business functions can be improved for additional cost savings.

  1. Improve Compliance

What you don’t know can hurt you. In addition to any employment laws on the state level, employees are also protected by more than 180 federal laws administered by the Department of Labor alone. Trusting a PEO to stay abreast of the ever-changing laws related to hiring, taxes, insurance claims, wage claims and benefits can help minimize the threat to your company. A PEO focuses on compliance and is proactive at keeping you informed, plus they can provide specific guidance when you need it.

  1. Health Care Reform Support

PEOs have studied health care reform since it was enacted in 2010. These experts help your company stay compliant with the law, satisfy the plethora of requirements in the Affordable Care Act (ACA), and reduce the risk of financial penalties. Just a few of the requirements of the AC A include a 90-day maximum waiting period for group health insurance, coverage of essential health benefits, and an annual Summary of Benefits and Coverage – and that just scratches the surface.

  1. Provide New-to-You Services

PEOs can provide businesses with services that they normally don’t have access to such as recruiting, employee administration, benefits management, government compliance, expertise to minimize employee-related risks, training and development. These new benefits are part of the reason why 44 percent of companies are looking to outsource.

  1. Ability to Focus on Core Business Functions

Your HR department doesn’t produce a product, but it consumes plenty of time and energy. Outsourcing your HR frees up your resources to focus on your core strengths. PEOs allow business leaders to focus on what their company does best while the PEO handles the rest. Human resources can be complex, costly and is constantly changing. Consider handing over the reins to the experts so you can get back to your core responsibilities and duties.

HR departments are challenged with two main responsibilities: focusing on core business functions and addressing the day-to-day needs of employees. PEOs are a viable option for companies that are looking to improve the organization’s main business and eliminate the middleman position with employees. Know when to outsource your company’s human resources, knock out the daily HR tasks and get back to business.


Ready to take the next step toward hiring an expert PEO? Email solutions@worksmartpeo.com or call (317) 585-7870 to get started today.


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