In the United States, small business owners are finding themselves spending between 35% and 45% of their time on employee-related paperwork. This includes tasks such as running payroll, purchasing workers' compensation insurance, providing employee health insurance, processing W-2s, tracking and filing payroll taxes, mailing forms on time, maintaining compliance with federal, state, and local laws, and defending the company against workers' compensation claims and audits. This overwhelming workload often leads to small businesses struggling to stay afloat, and many potential entrepreneurs are deterred from starting their own ventures. However, the 21st century has brought about new ways of doing business that can help small businesses thrive.
Typically, a small business owner's lawyer is located in one city, their accountants in another, and payroll is handled by a separate company in yet another city. This disjointed approach, coupled with rising workers' compensation and employee health insurance costs, can make running a small business feel like an uphill battle. The constant juggling of paperwork and employee issues can leave little time for profit-generating activities, putting businesses at a disadvantage compared to competitors who have modernized their operations.
To stay competitive and profitable, small businesses must adapt to the 21st century way of doing business. This involves streamlining operations and reducing time wasted on non-core business activities. But how can this be achieved?
The answer lies in outsourcing. By letting go of in-house lawyers, accountants, human resource managers, benefits managers, risk managers, and information managers, and instead outsourcing these tasks to a Professional Employment Organization (PEO), businesses can focus on what they do best: their core operations.
A PEO manages the "business of employees," freeing up business owners to focus on bottom-line profits. If a competitor is already using a PEO, they are likely spending 35% to 45% of their time earning profits rather than dealing with employee issues. This gives them a significant advantage, and it's an advantage that other businesses can also leverage.
Moreover, employees of businesses that use PEOs often receive high-quality health benefits, which can boost employee satisfaction and productivity. With a single phone call to a PEO, all employee-related tasks can be taken care of, simplifying operations and reducing stress for business owners.
While this article provides a brief overview of the benefits of PEOs, there is much more to learn. Small business owners interested in modernizing their operations and boosting their bottom line are encouraged to delve deeper into the world of PEOs. By doing so, they can transform their businesses and thrive in today's competitive marketplace.
For more information on PEOs, visit the National Association of Professional Employer Organizations or check out this comprehensive guide on how to choose a PEO from Business.com.
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