One of the main functions of every business is, naturally, human resource management. You want to keep your employees happy, while at the same time ensuring a proper workflow, and staying in compliance with the associated laws and regulations. It’s definitely a lot. Perhaps the tips from this useful source could make things a bit easier.
As your business grows, you will have to decide how to manage your HR. You have the option of doing it in-house, or the option of partnering up with a PEO (Professional Employer Organization). And, you have to decide between the two. How can you decide, though?
MORE NEWS: Arizona economy keeps rolling: Here are the numbers
Well, you can’t before taking the time to figure out precisely what both of these options entail. Or before figuring out what the advantages and the disadvantages of each one of these are. So, what we are going to do right now is explain these two solutions for you, and then help you compare them, in an effort to figure out which is best for your business.
What Is the In-House HR Solution?
Let us start right away. What exactly is the in-house HR solution? To put it simply, this means that you have to hire an in-house team of HR experts, and form a department that will handle all the human resource functions within your actual organization. They will handle everything, from recruitment and training, to employee relations, payroll, benefits administration and compliance. So, you get your very own team that will be handling all the processes in house.
What Is PEO?
On the other hand, there is the option of partnering up with a Professional Employer Organization. Basically, this means that you’ll be hiring an external firm to handle all your HR needs through a co-employment model. When you do this, you free up you resources and get to focus on your core business functions, while a dedicated partner is handling everything HR related.
Which Is Better for You?
So, which one of these options is better for you? Well, there are quite a few important factors to compare when trying to figure that out. For one thing, there are the cost considerations, and when you visit PEOcosts.com or similar websites, you’ll realize that outsourcing to a PEO can be a more cost-effective solution, and that there are various options to choose among, allowing you to customize the services you want to get and thus pay only for what you’re getting. On the other hand, when you hire an in-house team, you’ll be responsible for all of their training, salaries, benefits, as well as the HR technology, which can turn out to be a much costlier option.
Next, you have to think about compliance and risk management. This means that the in-house team you hire, for example, has to stay on top of all the labor laws, and all the new rules and regulations, and you are the one who has to check if they are doing that. Naturally, this requires continuous training, which can actually be quite challenging for a lot of businesses. When you, however, partner up with a PEO, you can expect them to be quite knowledgeable on all the regulations, to always keep compliance in mind, and to even assume some liability in case of disputes.
Moving on, if you’re planning on scaling and growing your business, and you most probably are, that is another thing to consider when trying to make this decision. Basically, as your business grows, your in-house team may find it difficult to navigate and keep up with the increasing demands, all of which will require additional training and, thus, additional investments. A PEO, on the other hand, is the perfect choice for businesses that want to scale quickly without having to worry about expanding their HR infrastructure. Capable of handling HR needs for businesses of any size, they allow for seamless growth.
So, How to Make the Choice?
Reading the above, you have gotten at least a slightly better idea about the advantages of these two different options. Yet, you may not be sure how to make the final choice. Every business is different, and you need to find the solution that works for you best.
So, if you are looking for full control over your HR policies, and you have the resources to build and maintain a whole team, you should hire in-house. But, if you want to save your resources and focus on your core business growth, while having all HR tasks managed effectively, and while staying in compliance, then you should go for a Professional Employer Organization. In the end, you have to focus on your needs and priorities.
One more thing. If you decide to hire a PEO, you should take your time to do it right. After all, you’ll be choosing a long-term partner, and you want to make sure that they can do great work for you. So, do your research before making any decisions.
