Ventures Charlotte - Fourth Quarter 1999

Contracting for Personnel Services Solves Problems

For many small businesses, personnel issues present a major challenge. While it's not feasible for them to staff a complete human resources department, the issues involved are intensive and complex.
That's why many companies now are contracting for human resources administration through Professional Employer Organizations (PEOs). Most report that, besides being liberated from handling difficult personnel issues, they're also able to offer better benefits and retain valuable employees.

"Most of our clients never would have believed that outsourcing their employer responsibilities to a PEO would ultimately help with employee retention. But it does, and the theory is being proven every day as the PEO industry grows at a rate of 30 percent annually with more small business owners becoming steadfast believers," says Harvey Kennedy, district manager of Administaff, a leading national PEO with a Charlotte office.

A PEO ensures that the responsibilities of payroll, employee benefits, workers' compensation, employer-related regulatory compliance and other important personnel matters are handled efficiently and accurately. PEOs provide the resources, support mechanisms and experts to help business owners better manage the obligations and opportunities of being an employer.

PEOs also offer small to medium-size businesses a direct advantage: the ability to offer employees the kind of benefits typically provided by Fortune 500 companies. Many high-caliber employees consider such benefits a deciding factor when selecting a company. "Businesses are finding that in today's tight labor market it's easier to attract and retain quality employees when you can offer excellent medical and dental coverage, a 401(k) plan, an employee assistance program, credit union services and a host of other value-added benefits," says Kennedy.

The Small Business Administration reports that while more than 95 percent of large employers provide health insurance, only 65 percent of smaller companies do so. The disparity is much greater for other benefits such as retirement plans, life insurance, disability insurance, vision care and educational assistance.

Using the economies of scale offered by a PEO, small businesses are now able to offer employees attractive benefits. Outsourcing employer-related matters to a specialist can result in higher quality and more consistent services for employees. And research indicates that employees who are well cared for tend to be more productive.

PEOs can also assist in further improving employees' performance and abilities. Top PEOs can custom-design a training program for your company to boost employee productivity and help you achieve your business goals.

PEO offerings are extensive, including the availability of human resource specialists who can help with dispute resolution, write job descriptions, assist with pre-employment testing and help develop personnel policy. They also can train your supervisors in the areas of performance reviews, employee counseling, leadership skills and motivation techniques.

"The potential for company growth is in your hands and in the hands of the employees you entrust to carry out the responsibilities of your business," says Kennedy. "It is inevitable that as our company grows, the demands of personnel administration become more complicated. With a quality PEO, you can be confident that your employer-related responsibilities are handled properly, which gives you the peace of mind and the time you need to focus on core business issues."

For more information about Administaff call 800-465-3800.

Reprinted with permission of Venture Charlotte.