Exactly how much time does your company spend on HR-related tasks? An infographic from TotalJobs.com shows that, on average, HR teams spend a combined 50.7 percent of their time on three non-HR-admin areas within a business: meeting with senior staff and business partners, employee relations and engagement, and meeting with employees. While these areas are arguably important to moving the business forward and making sure employees are happy, this means essentially half the remaining HR staffs’ time is being spent on admin-related tasks. With the number of hours that go into HR admin-related tasks, more and more companies are turning to professional employer organizations as a solution.
Once your company makes the decision to outsource your HR needs by partnering with a Professional Employer Organization (PEO), the question still remains: is it more beneficial to work with a local or national PEO? Based on our hands-on experience with this very topic, allow us to share why choosing to engage with a local PEO is the way to go:
Knowledge of local compliance laws
There are more than 180 federal employment-related laws for companies to comply with. On top of that, each state has many of its own employment-related laws. Hiring, taxes, insurance claims, wage claims and benefits – the laws are complicated and plentiful. Joining a local PEO ensures the utmost understanding of the local laws and regulations related to employment, in addition to the many national laws. State laws are constantly changing and updating, so you need to look for a local PEO that has a deep understanding of these local compliance laws.
More time for customers
Local PEOs provide the advantage of being directly available to their customers, and therefore more flexible with their service offerings. While national PEOs tend to be bigger and work with clients across several regions, a local PEO tends to be smaller and more accessible. This means your employees have easy access to in-person onboarding, they can get their benefit questions answered in a timely manner, and you as the employer will experience faster turnaround time on documentation and payroll-related issues.
Local marketplace expertise
When you join a local PEO, knowledge of the local marketplace is a major advantage. Your local PEO will be on the ground with you. This means you can be sure your employees are being provided with the best benefit package options available in your local area. National PEOs are not likely to have the same understanding of these local benefit options. Keep your PEO partnership local and your employees will thank you for it.
According to a report from IBISWorld, the PEO industry is expected to experience consistent growth over the next five years. While these growth statistics demonstrate that outsourcing HR needs through a PEO is a trend that is here to stay, there is still a lot to consider when deciding whether to join a local or national PEO. It’s not hard to see why local is the way to go.
Matt Thomas is president of WorkSmart Systems Inc.