CoAdvantage- When we talk about the benefits of HR outsourcing, we normally address the advantages for the employer: reduced HR-related costs, freed up time to focus on core business goals and revenue generation, better benefit offerings, and more. Even the benefits for employees often circle around to benefits for the employer, like reduced turnover and more satisfied employees.
But this begs the question: separate from the beneficial impact to employers themselves, what does HR outsourcing mean for the employees themselves?
To start, some of the advantages of HR outsourcing for employers actually translate directly into advantages for employees. For example, according to research from the National Association of Professional Employer Organizations (NAPEO), employee engagement among PEO users is five points higher than among non-PEO users. That’s great for employers because it leads to increased engagement, morale, loyalty, and retention. It’s just as great for employees themselves because it’s the direct result of improvements to the employee experience:
- Access to robust and convenient self-service options.
- Improved accuracy that can reduce issues like payroll or benefits errors.
- Access to HR experts who can answer more complicated questions faster.
Overall, a PEO almost always creates a smoother and more polished employee experience from the point of hiring through onboarding, training, and ongoing relations.
Notably, a PEO is a co-employer of the employees. While the business owners always maintain control (they never stop being the ones who “own” the relationship), the PEO becomes “employer of record” for handling administrative and regulatory issues like payroll taxes. Thus, the PEO has its own (limited) direct relationship with your employees. The good news is that good PEOs really know what they’re doing, making them skilled at fostering excellent relationships with employees.
This may sound counterintuitive. Wouldn’t employees prefer in-house options? Wouldn’t they rather just stop by Bill-in-HR’s desk or Kate the business owner’s office to take care of an issue, rather than having to contact a third-party?
Not necessarily! Often, Bill or Kate will have multiple responsibilities and too much on their plates. They’ll often reply, “I’ll have to get back to you on that,” and then take days (or longer) to do so. What employers and employees often don’t expect form PEOs is the high-touch service that can provide immediate answers even to highly idiosyncratic and complex questions. That’s the benefit of having access to HR experts who deal with these kinds of inquiries all day, every day, across many organizations.
Sometimes PEOs also help employees to keep their jobs! NAPEO also found that PEO clients were 60% less likely to permanently close during the pandemic than non-PEO clients. It’s always an advantage for employees to be able to keep their jobs!
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.