One of the biggest challenges that small to mid-sized businesses have to make is deciding what positions they need to hire employees for and what positions can be outsourced. When it comes to payroll, there are many benefits to outsourcing your payroll or using a professional employer organization, also known as a PEO, instead of hiring one or two full-time employees. Learning about these benefits can help you make an informed decision about which option is the right fit for your company. Here are some of the befits of using a PEO payroll service.
You May Save Money By Not Hiring an Employee
Perhaps one of the biggest and most notable benefits associated with outsourcing your payroll services is that you aren’t hiring a full-time employee to complete the task, which may help you save money. Hiring employees is costly. You may have to place paid ads online to find help, you have to wade through a sea of resumes to find qualified applicants, you have to spend time interviewing those applicants, and then you have to complete background checks. Once you’ve hired an employee, you have to pay them, provide them with benefits, pay part of their social security taxes, and obtain workers’ compensation insurance for them. This all adds up. For many businesses, it’s more cost-effective to simply outsource their payroll compared to the costs associated with hiring an employee to complete payroll.
You Aren’t Responsible For Maintaining Payroll Software
One of the lesser talked about benefits that you may experience if you outsource your payroll services is that you aren’t responsible for maintaining payroll software. It’s important to have payroll software that is up-to-date and completes the tasks that need to be completed. Constantly having to buy new software or update your version can add up. And, if you don’t know how to install the software, you may have to hire an IT professional to help. This isn’t something that you ever have to worry about or even consider when you outsource your payroll needs.
You Have Payroll Help Available When You Need It
Many small to mid-sized companies only hire one or two professionals to run payroll and handle the human resources needs. But, when you hire employees, you may find yourself short-staffed if an employee takes a vacation, calls out sick, or is out on disability or maternity leave. This can leave your business in a tough spot, especially if you’re not familiar with the payroll processes yourself. One of the huge benefits associated with outsourcing your payroll services is that you always have help available when you need it. Since you’re hiring a company, not an individual, there is always someone around. You never have to worry about an employee calling in sick or taking a vacation.
They Stay on Top of New Laws and Compliance Issues
The final benefit to outsourcing your payroll services is that you don’t have to stay on top of new laws and compliance issues. The payroll service stays on top of all of this. Your company can be fined if it handles payroll internally and does not follow new laws or is not compliant with new rules or restrictions. As such, you and your payroll employees have to spend a lot of time ensuring you are compliant. Outsourcing makes a lot more sense, as the PEO is responsible for staying on top of new laws and compliance issues. This can save you both time and money.
When it comes to running a business, the choices you make have a direct impact on your bottom line. Hiring employees can be costly, as you not only have to pay them, but you may also have to provide them with benefits, such as health insurance, 401K matching, and paid time off. If you need to run payroll but don’t need a full-time employee just for that task, utilizing a professional employer organization or PEO payroll service offers many unique benefits, including cost savings. This makes it ideal for a large percentage of small to mid-sized businesses.
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