Is my business too big for PEO?

Engaging with Professional Employment Organisations can save your small to medium business a lot of time and money. Whether you’re a boutique organisation or a 250-man operation, the benefits of outsourced HR can be immense, but at what point in a business’s life does it become to too big an operation to benefit from PEOs?

So, what does it depend on? 

Let’s look at the core functions of Australia PEO: payroll management, Human Resources Support and immigration and visa management. These functions can no doubt be daunting for a one-man band, young business or boutique store but it’s possible to accomplish these tasks internally for a company of 150 when they’ll absorb the cost and risk (if done the right way). The question is not if it’s possible, but if it’s worth it.

Like most things in the corporate world, it all boils down to your unique business situation. Employment management in some industries can be quite straightforward, regardless of how big the company is. These companies experience slow-growth and relatively small turnover and employees have basic skill sets (with few training requirements). HR processes, therefore, take less time to administer and are less costly and time-consuming.

The vast majority of mid-sized businesses have complex needs. Their markets are volatile and they are wanting to grow fast. They want the best talent they can find, for a healthy salary and they want to secure, develop and keep them. These companies need serious expertise when it comes to HR. But that’s not saying you can’t outsource to a PEO.

In 2019, the Australian Fair Work Commission announced regulatory changes to pay rates, both penalties and increases. The minimum wage rose to $18.93 per hour and penalty rates were reformed in the Fast Food, General Retail, Hospitality and Pharmacy industry. If you didn’t already know this, you’re not alone. Keeping up with the constant changes in law is seemingly impossible for some businesses and one wrong step can plop you into a whole lot of trouble. It takes resources and sheer diligence to keep up with these changes and businesses of all sizes often struggle when it comes to adapting. It can be safer and more cost-efficient to hand HR over to the people who keep their finger firmly pressed to the pulse. PEOs have proven to be excellent, stable resources throughout the turbulent changes in the law over the years. Outsourcing HR allows you to focus on what your business does, not what the government does.

On the other side of the spectrum, there comes a time when the business has grown to such a point, they’ve developed their own set of unique circumstances and requirements. At this stage in a business’s life, an in-house HR department can tailor and customise each area of HR to their unique requirements but in the lead up to this stage, PEOs can offer the support and services a company needs to get them there. i.e. employee development, training or more focused hiring practices.

It’s not a question of whether your business is too big or small, it’s a question of which PEO suits your style and size of the operation. It also comes down to financial viability: the costs and risks associated with PEO versus the costs and risks associated with an in-house HR department. Talking to an Australia PEO expert today could help you find huge savings on time and resources. 

To find out how Australia PEO can tailor their expertise to your unique business situation, click here.

This article was originally published on Australia PEO's official site here.