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Professional Employer Organizations (PEOs) are becoming an increasingly popular choice for businesses looking to manage HR, payroll, and compliance tasks while focusing on their core operations. However, many misconceptions still cloud the decision to work with a PEO. Let’s clear up four common misunderstandings about PEO hiring and show how partnering with a PEO can benefit your business.
One of the biggest myths about PEOs is that they’re only suitable for large corporations. The reality? PEOs are particularly valuable for small and medium-sized enterprises (SMEs) looking to scale efficiently.
PEOs provide smaller businesses with access to resources typically available only to larger companies. For example, they can help with:
By handling these time-consuming tasks, PEOs free up your team to focus on growing your business. A survey by the National Association of Professional Employer Organizations (NAPEO) even found that businesses using PEOs grow 7-9% faster than those that don’t.
Some business leaders worry that hiring a PEO will result in losing control over their HR operations. However, this couldn’t be further from the truth.
When you partner with a PEO, your company maintains control over day-to-day management decisions. The PEO acts as a co-employer, meaning they handle administrative tasks like payroll, compliance, and benefits, while you retain control over hiring, performance management, and company culture.
Think of it as having an expert HR partner on your side, not someone taking over your business. This partnership helps you stay compliant with regulations while keeping the focus on your strategic goals.
Another common misconception is that PEOs are a costly option, especially for smaller businesses. But consider this: the cost of handling HR in-house—including hiring HR staff, investing in technology, and navigating legal risks—often outweighs the fees associated with a PEO.
PEOs operate on economies of scale, providing access to premium benefits and tools that would otherwise be out of reach for SMEs. Additionally, they help reduce costs associated with compliance penalties and inefficient payroll processes.
For instance, a study by NAPEO found that businesses using PEOs experience a 27.2% lower employee turnover rate. This means fewer recruitment costs and a more stable workforce, saving you money in the long run.
It’s easy to think of PEOs as an HR outsourcing service, but the truth is they’re much more than that. Unlike a traditional outsourcing arrangement, PEOs operate as co-employers, sharing responsibility and liability for certain HR tasks while working closely with your internal team.
This collaborative model ensures that the PEO’s services align with your company’s goals and culture. They don’t just handle tasks like payroll or compliance; they also provide expert advice on HR best practices, helping your business stay ahead of the curve.
Understanding what a PEO does and how it works can help you make informed decisions for your business. By debunking these misunderstandings, it’s clear that PEOs offer significant value for companies of all sizes. They provide cost savings, expertise, and support, allowing you to focus on growing your business.
Ready to explore how a PEO can work for you? At Glints TalentHub, we’re here to help businesses navigate the complexities of hiring and HR. Let’s build your team together!
Glints TalentHub is our complete talent solution that covers all aspects of talent acquisition, management, and development. Our team can help you access the extensive talent pool across Southeast Asia and build great teams quickly and affordably. Simply schedule a call with us and our dedicated experts will be thrilled to guide you in your journey towards building a borderless team.
This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.
Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.
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