Outsourcing Payroll- Just the First Step

by | 5 Apr, 2017

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A common piece of advice given by business consultants is: focus on what you do best and outsource all non-core functions of the business. In most businesses, administrative functions, such as payroll and tax filings, while critical, are still considered non-core functions.

Although payroll administration may be a non-core function, it holds a lot of importance. Get it wrong and employees will be left feeling dissatisfied, undervalued, and demotivated…to say the least. Payroll processing can also be a complex and time-consuming distraction that draws attention away from other key functions that help a business to grow.

For these reasons, outsourcing payroll can be a great decision for many employers. It provides not only time savings, but also improved security, fewer errors and reduced compliance risk.

What many employers may not realize, however, is that the benefits they receive by outsourcing their payroll can be expanded to alleviate the other headaches associated with employee administration – like HR and compliance management, employee benefits and workers’ comp insurance.

An outsourcing option that is growing in popularity is to engage a Professional Employer Organization (PEO) to handle the daily grind of HR admin. PEOs aggregate employers together to provide HR, technology, insurance and regulatory compliance management. The result… a more efficiently run business at a lower cost.

Some of the functions can include:

  • Worker’s Compensation Insurance: The key advantage to the small business owner is improved cashflow. Under a PEO, workers’ comp insurance is typically provided on a “pay-as-you-go” basis – with no upfront deposit and also no year-end audit.
  • Employee Benefits: Benefits are expensive, but they are also instrumental in helping to attract and retain top talent. By leveraging the PEO’s group buying power, you can offer a benefits package that will rival those typically only found in Fortune 500-type companies. And better yet, the PEO handles all of the plan shopping, rate negotiations and administration.
  • Human Resources: Most small businesses cannot afford to fully staff a Human Resources department. So, the HR related tasks in a small business are usually distributed to several different employees within the organization – most of whom have little to no formal human resources training. By utilizing a PEO, small businesses gain the expertise and guidance of trained HR professionals. This not only can keep you in compliance with the ever-changing labor regulations, but can also provide you with sound advice to help improve employee performance and even mitigate the potential risks of employee practices liability.

So, if you and your staff are spending too much time on HR administration, then it may be time to look at some outsourcing options. For small businesses, the best way to manage your HR is —don’t… Instead, let a PEO handle it for you!

Navigate is a Professional Employer Organization (PEO) that is dedicated to alleviating the administrative burden placed on businesses. We do this by providing the structure, foundation and ongoing support needed to thrive and grow in a competitive and evolving market. If you would like to learn more about how your business could benefit from these services, contact us at (781) 552-5040 or click here to request a free consultation.

Tom DiSilva
Tom DiSilva has been providing professional human resource services for over 30 years. As the CEO of Navigate PEO, he actively partners with organizations of all sizes in the Greater New England area and across the country to help their businesses grow. He has expertise in HR and Labor Management, offering guidance and support for key areas of business such as negotiations, operations management, employee coaching, and employee benefits design. . He is an active member of The Society for Human Resource Management (SHRM), The National Association of Professional Employer Organizations (NAPEO), Professional Association of Co-Employers (PACE), and The American Payroll Association (APA). He is deeply committed to giving back to the community both personally and through Navigate Cares, which provides support for several nonprofit organizations such as the USO, The Boys & Girls Club, and the 3Point Foundation.

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Disclaimer: this article does not represent expert advice and is provided for informational purposes. Please get in touch if you would like expert HR advice.