Competition is at an all-time high as businesses of all sizes strive for their share of talented employees looking for great opportunities. This can be especially challenging for small and mid-sized businesses (SMBs), which often have fewer resources than larger corporations. In addition to rising health care costs and complying with complex regulations such as the Affordable Care Act, SMB owners increasingly face demands to offer benefits that better suit employee needs (e.g., new parent leave, schedule flexibility, robust retirement programs and health care support). These are the important differentiators that help companies attract and retain top talent, so it’s crucial for SMBs to keep up and adapt.
So how can SMBs juggle all of this responsibility with swelling workloads and limited resources? The simple answer: They don’t have to go at it alone. Enlisting a Professional Employer Organization (PEO) can help SMBs offer the attractive benefits and other perks their employees want. The combination of increased HR complexity and employee demand for richer benefits is creating a market condition that has allowed for the popularity of PEOs to surge. So far, I don’t see any signs of it slowing down.
Here’s how it works: A company enters into a co-employment relationship with a PEO, in which the company retains day-to-day control over management of their employees and the PEO handles responsibility for administering HR and employee benefits. In addition, a PEO can provide advice along the way through its people’s expertise and powerful HR technology that will help them make the right decisions for their employees. This lifts a huge weight off the shoulders of SMB leadership and opens doors to more robust offerings, such as better health benefits, retirement plans and employee growth/development programs. Attracting and retaining top talent can be a major challenge for SMBs, so this extra assistance goes a long way in helping offer the benefits today’s job seekers expect while enabling a stronger focus by SMBs on making their companies successful.
As Millennials continue to dominate the workforce and Baby Boomers head into retirement, the needs of today’s employees are changing rapidly. That means the benefits companies offer have a greater impact than ever before.
In fact, according to the 2015 Strategic Benefits Survey conducted by the Society for Human Resource Management (SHRM), 38 percent of HR professionals reported that their organizations leveraged their benefits program to recruit employees at all levels in the past 12 months. Developing a robust benefits program is an excellent way for businesses to grow employee engagement and motivation. Gallup research from January 2016 also found that only 32 percent of U.S. workers were considered engaged in their jobs. The majority of employees (50.8 percent) were “not engaged,” while another 17.2 percent were “actively disengaged.”
The war for talent is real and increasing in velocity every day. PEOs can be key partners, helping SMBs stay ahead of the curve to advance their business objectives, recruit top talent and reduce employee turnover.Corporate Compliance Insights is a wholly owned subsidiary of Conselium Executive Search, the global leader in compliance search.