More than 60 percent of business owners say they read federal regulations, only to find out they don’t apply. This happens around half the time.
Compliance is an important task, but that figure also shows it can be a massive drain on resources. Couldn’t you spend your time doing something other than wading through the tax code?
You can probably think of a few things to do instead, but you know you need to stay up to date on your compliance as well. That’s where a PEO can help.
What is a PEO?
The term PEO stands for “professional employer organization.” This type of company helps small business owners like you manage their HR with ease.
Some statistics say small businesses waste around $27 billion every year on HR tasks. One of the biggest problems is having people who aren’t HR specialists do the work. It’s easy to see how:
- Untrained employees don’t have the right skills, which means they take longer to complete tasks.
- They’re also more likely to make mistakes, which can cost money.
- These employees could be more productive if they handled tasks in their area of expertise.
- These employees may not be satisfied with their jobs, so they might choose to quit. This leads to higher turnover and higher costs.
Working with a PEO lifts the HR burden from your employees’ shoulders. Instead, you can turn it over to trained experts. By working with a PEO, you can save time and money.
Compliance Monitoring with a PEO
One of the services a professional employer organization usually offers is compliance monitoring.
As already established, compliance is an enormous task for almost any business. There are thousands of federal regulations HR personnel need to comb through. These regulations cover everything from taxes to payroll to wages and safety in the workplace.
Then there are also state regulations to track, as well as city and county codes.
Beyond that, rules are almost always changing. New laws create new obligations for employers. You may have been in compliance for years, but a new rule will suddenly make your company policy outdated.
The Affordable Care Act is the perfect example of that. The law has been in flux every year since it came into effect, and more changes are on the horizon. Employers have to keep updating policies to ensure they comply.
As you can see, compliance is one of those tasks that needs to be undertaken on an ongoing basis. You can’t tick a box and never think about it again.
That’s why working with the PEO makes perfect sense. The professional employer organization is often already monitoring compliance for all their clients.
What’s more, the PEO’s team of experts uses both technology and their expertise to help you stay on top of compliance. They’ll track upcoming changes and review your current HR policies against them.
Working with the PEO saves time and money, but most valuable is the insight and advice from a team of experts. The PEO’s team consists of HR experts who use their knowledge to give you the right advice every time.
The Risks of Handling Compliance on Your Own
What happens if a small business owner handles compliance on their own? In most cases, they’re taking some serious risks.
The most obvious risk is that they’ll violate a federal or state regulation. Non-compliance can result in penalties, which cost your business. Often, business owners may not even be aware there’s a rule they’ve broken.
The average cost of a non-compliance fine is more than $30,000, and one in 10 businesses are cited every year. Lawsuits are another costly outcome of non-compliance with some regulations.
That’s another risk of handling compliance on your own. With so many regulations at three different levels, it’s difficult to stay on top of. It can be very difficult to know which rules actually apply to you and which ones you can ignore.
That’s why many small business owners spend so much time checking regulations that don’t even apply to them.
All that time adds up. Many small business owners say they spend a full work week or more on federal compliance alone.
That time represents a cost to your business. Small business owners handling compliance on their own often pay more than some of their employees’ salary.
How the PEO Reduces Risk
Handling compliance on your own comes with both challenges and costs. Working with a PEO can help you navigate those challenges and reduce the costs.
The PEO’s help reduces the costs of compliance to your business in many different ways. First, they help you by helping you avoid missteps and mistakes that can land you in hot water. This way, you can avoid paying penalties.
Next, they also reduce the amount of time spent on monitoring. With better knowledge of the regulatory landscape, they help identify compliance issues with ease. This means you’ll waste less time worrying about rules that don’t even apply to you.
They also use a more streamlined process, which helps identify issues faster.
In turn, you can focus on the areas of compliance that may actually be issues. With expert advice in hand, you’ll be able to find better solutions to compliance issues.
Finally, they let you get back to the tasks that you’re best at. When everyone plays to their strengths, productivity and growth are the result.
Get Better HR All Around
When you work with a PEO, human resources administration in your business is bound to improve. Compliance monitoring is just one of the tasks a PEO handles to make better HR possible.
A PEO is ready to help you with all aspects of your human resources, from compliance to workers compensation to payroll. If you’re ready to discover a better way to handle HR for your business, get in touch with the experts today.