Emerging entrepreneurs are often full of stamina that’s constantly being recharged by crisp ideas and the encouraging horizon of first successes. While you’re highly motivated to lead your start-up business to greatness, you’re facing a merciless business environment with unprecedented challenges and competitiveness that can leave you short of goals and lacking in risk management. Overlooking, ignoring, or mishandling these challenges and risks is often the culprit pushing your business’s profitability needle from black to red, which is a place none can survive, much less thrive, for very long.
Start-Up Challenges 101
Take a look at most any list of challenges faced by new entrepreneurs and businesses. Experts list a number of potential and likely pitfalls and struggles, but one problem continually makes the top three. What is it?
Acquiring new talent, and it’s a multifaceted problem for start-ups. Why?
Emerging businesses can find it extremely difficult to just find and hire a workforce with the required technical skills, knowledge, and/or education to add value to their business. Even the largest and most successful HR departments struggle with quality employee acquisition and retention strategies.
Ever wonder why large companies devote so much time and energy to team-building activities? It’s because they know how important it is for their workforce to share a congruent passion, enthusiasm, and mentality with each other and the business itself. That’s an even harder box for small businesses with limited to no human resources to check.
Finding the right workforce for your organization is a huge financial investment and time leach. It’s time and money that you could be devoting to the roots of your business. How much is onboarding?
Research shows that the total hiring cost of your average salaried employee is equivalent to at least half of their annual salary, and that cost can go up to nine months of their salary for a highly skilled employee. By the time you recruit, onboard, and train a $60,000 employee, for example, you’re looking at a minimum investment of $30,000. That’s just a single employee, and it’s a time and money expenditure that few start-ups can afford.
There’s also the risk management factor in that any number of legal liabilities and problems can arise related to hiring and employing a workforce. A single lawsuit can result in years of litigation, taking time, money, and energy away from your business.
Of course, the above doesn’t even consider if you’re an entrepreneur looking to enter or expand into the international realm of business. When the above hiring process is international, the costs, complexities, energy, and problems triple for onboarding. You must have extensive manpower, resources, and business and legal expertise to even consider venturing off into an international hiring situation.
There are plenty of problems, but is there a viable solution? Yes, and this is where consulting with a PEO can become your start-up’s new BFF.
What Is A Professional Employer Organization?
PEOs, or Professional Employer Organizations, are consulting partners designed to shoulder the complexities and vastness of local and international ventures in the hiring process. Working alongside you, the
PEO broker service objective is to simplify workforce solutions and minimize your time and financial risk factor. From Human Resources, Payroll, Benefits, Workers Compensation and Compliance, PEO handles an array of tasks that easily bog small business owners down.
Benefits Of PEO
Let’s explore just five of the many benefits PEO brings to your startup’s hot button areas:
1. Payroll
A PEO consultant can significantly reduce your payroll burden by handling calculations, disbursements, calculations, acquisitions, and terminations.
2. Compliance
Young companies have a lot to consider when venturing internationally. PEOs are ideal short-term solutions to help you navigate international business and hiring laws so that you can engage in key processes without compliancy worries. This offers you expertise in both your industry segment and handing employee-related demands.
3. Benefits
Service is beyond HR services. You’ll tap into an infrastructure with resources offering superior benefits, including 201 (k) plans and health insurance, that smaller firms often find impossible to offer on their own. Such health benefits empower you to attract top talent at a lower cost, and it actually helps you retain that talent and lower your employee turnover costs.
4. Liability
You gain a partner to share the risk of employment-related liability and legal issues. This partnership helps to mitigate and absorb legal liability costs of hiring, staffing, and other employment issues that could easily wipeout a start-ups finances.
5. Growth
You stay growth-ready by freeing up crucial monies, manpower, and time you’d otherwise be spending micromanaging your hiring and staffing needs, human resources , accountant demands, payroll services, health benefits and so forth. Your consultant partner equips your company for that next stage of growth when your international venture is successful.
In closing, partnering with the right PEO broker is an end-to-end, custom solution to one of the most tedious obstacles small businesses face today, and it isn’t just a direct problem solver for employment issues. Unlike other solutions with narrow scopes, such as a payroll service broker, PEOs offer liability insulation to protect your solvency and growth.