Control HR Costs by Using a Professional Employment Organization

One of the main challenges that small and mid-sized businesses face is managing and caring for their employees. Factoring in payroll, taxes, and insurance costs, employee-related costs can be one of

During recent years, Professional Employer Organizations (PEOs) have become a viable new way for smaller companies to save money on their human resources costs. A PEO manages all your employee-related functions — payroll, taxes, insurance — very cost effectively, freeing you to focus on your business.

Once you hire employees, you are required to pay them a salary, pay unemployment fees, and take out workers' compensation insurance. Depending on the number of employees, larger companies normally delegate employee-related functions to a dedicated human resources department. But what should a company do when it has too few employees to justify creating a formal HR department?

This problem has given rise to HR outsourcing firms that companies contract with to take over certain employee-related tasks. Outsourcing takes the HR burden off smaller businesses and transfers them to an outside firm that specializes in the various areas of human resources: payroll administration, benefits, and employee orientation and training. The benefits HR outsourcing can offer include: