10 Small Business Struggles Solved: Discover the Power of a PEO

By Jeanette Coleman, SPHR & SHRM-SCP on Apr 15, 2024
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Running a small business is challenging, especially when the weight of day-to-day operations amplifies your small business struggles. If you're feeling overwhelmed, you're not alone. Many small business owners face similar challenges, with not just operational demands but also ensuring their business and employees thrive.

Managing human resources is one significant area where small business struggles can become particularly acute. Compliance issues, healthcare costs and employee management can further strain your resources and energy. It's crucial to recognize when these challenges are more than just a nuisance and when they might threaten the viability of your business.

This is where professional employer organizations (PEOs) come into play. By partnering with a PEO, you can offload these complex HR tasks to a team of experienced and highly skilled HR professionals, allowing you to refocus on stabilizing and growing your business. Learn how delegating HR responsibilities to a PEO can help you transform overwhelming challenges into manageable tasks, ensuring your business not only survives but also thrives.

why it makes sense to hire a peo instead of an HR person

How Do You Know You Need a PEO?

10 Signs It's Time to Outsource HR to a PEO

Three clear signs indicate it’s time to consider a PEO, helping to address some of the most pressing small business struggles. These include time and expertise struggles, employee relations and hiring challenges, and compliance problems.

Let's explore these 10 common small business problems and take a deep dive into how a PEO solves them.

1. Time and Expertise Struggles

  • Business growth is stagnant or moving backward

Spending excessive time on HR administrative tasks can stifle your company's growth. For small businesses, where every minute counts, handling endless HR paperwork and compliance issues can prevent you from focusing on essential areas like financial management, sales, operations and innovation.

Outsourcing these responsibilities to a PEO frees up your schedule, potentially revitalizing business growth and alleviating common small business struggles.

  • HR paperwork is piling up

The complexity of HR paperwork can overwhelm even the most organized business owners. From employee onboarding documents to insurance forms, the paperwork never ends.

A PEO can manage these tasks efficiently, staying up-to-date with employment regulations and HR best practices, thus reducing your administrative burden significantly. Whatever HR issues your company encounters, the PEO’s team can manage the paperwork – and every other detail, too.

RELATED: Ask the HR Expert - How Long to Keep Payroll Records >>

  • It seems impossible to stay on top of payroll issues

Managing payroll is a complex and ongoing demand for small businesses. The intricacies of tax reporting and the high risk of costly errors can overwhelm those without expert knowledge. Simple mistakes in payroll can lead to significant financial penalties and complications.

Internally managing payroll often exposes small businesses to risks such as financial misconduct and security vulnerabilities. Additionally, staying updated with the constantly changing tax regulations can be daunting and time-consuming.

A PEO offers a strategic solution by taking over payroll responsibilities.

Partnering with a PEO brings:

    • Streamlined processes

      Efficient systems that handle all aspects of payroll
    • Enhanced security

      Robust measures to protect sensitive payroll data
    • Guaranteed compliance 

      Accurate, timely filings that adhere to current tax laws, reducing the likelihood of costly errors

This PEO partnership not only alleviates the administrative burden, but also secures your business against potential payroll-related issues, making it an invaluable asset in navigating small business struggles.

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Employee Relations and Hiring Struggles

Addressing employee relations and hiring is key to solving your small business struggles.

  • Losing top talent to the competition

In today's competitive job market, small businesses often find themselves at a disadvantage. Job seekers now have higher expectations and more options, making them choosier about where they work.

They evaluate potential employers based on salary, benefits and company culture. To remain competitive, ask yourself: How does your benefits package compare within your industry? Does your company culture attract the caliber of talent you seek?

A PEO can be instrumental in enhancing your offerings. PEOs help struggling businesses understand and meet the demands of top talent by researching, negotiating and implementing tailored benefits packages that appeal to skilled applicants. This support is crucial for small businesses facing intense competition for quality hires.

Additionally, a PEO can help you evaluate your business culture and develop strategies to improve employee morale.

RELATED: Small Business, Health Insurance and the PEO Option >>

  • Unsure if employees are hitting key performance metrics

Productivity is vital, especially for smaller firms that depend heavily on the output of each team member. However, it's easy to overlook signs of underperformance in the hustle of daily operations. Without effective employee reviews and feedback systems, you may miss opportunities to improve performance and engagement.

PEOs offer solutions to small business problems resulting from employee engagement issues by setting up effective performance review systems and feedback processes. They help ensure that your employees meet key performance metrics and address any gaps in skills or knowledge through targeted actions.

RELATED: Happy Employees, Thriving Business - PEOs Elevate Employee Satisfaction >>

  • Lack of employee engagement

Employee engagement refers to the practical and emotional commitment employees have to their positions and employers. A simpler explanation is that employee engagement equals how aligned workers feel with their companies.

Employees can disengage at work for multiple reasons: losing trust in senior management, not being involved in compelling projects that fit their skills and interests, not understanding how their work contributes to the company’s success or disharmony with colleagues, to name a few. Whatever the reason, that lack of engagement affects productivity, morale, and ultimately, retention rates.

A PEO can serve as a neutral party between employees and managers, providing insights and resources to turn things around for their clients.

  • Employee benefits costs are rising

The cost of providing competitive employee benefits is a significant struggle for small businesses. With health insurance premiums rising, many small to mid-sized businesses find it challenging to offer benefits that attract and retain top talent.

As a co-employer, a PEO leverages collective bargaining to secure more favorable terms for benefits, reducing costs while enhancing the attractiveness of your benefits package.

  • Recruitment and retention problems

Effective recruitment and retention are pivotal in maintaining a stable workforce. A struggling business is often challenged with crafting optimal recruitment strategies due to limited time and expertise.

A PEO can dramatically improve your recruitment processes by developing efficient, best-practice-based protocols—from creating precise job descriptions to implementing strong onboarding processes.

These strategies not only save time and money but also improve overall employee satisfaction and retention, addressing one of the key struggles of a struggling business.

RELATED: Talent Acquisition Strategies - PEOs Are a Game Changer for SMEs >>

Partnering with a PEO provides a comprehensive solution to the multifaceted challenges of employee relations and hiring. By aligning with a PEO, small businesses can transform their HR practices, making them more competitive in securing and maintaining top-tier talent, which is essential for overcoming small business struggles.

What is a PEO Need to Know Information

Compliance Struggles

Addressing compliance struggles helps to safeguard your small business.

  • Compliance with employment regulations feels like a maze

For small businesses, keeping up with the ever-changing landscape of employment regulations is not just challenging—it's a major part of ongoing small business struggles.

Compliance involves adhering to a myriad of federal, state, county and city laws, which can be overwhelming. These laws are continually updated, turning once-compliant policies obsolete and imposing new responsibilities. Moreover, the complexity of these regulations means that deadlines can easily be missed, despite diligent monitoring.

RELATED: Risk Management Strategies - The Transformative PEO Approach >>

  • Safety issues lurk in the workplace 

Workplace safety is another critical aspect of compliance. Accidents not only result in direct costs to the company but also negatively affect employee morale.

PEOs possess deep knowledge of safety regulations and can develop comprehensive safety programs tailored to your specific needs. Whether it’s ensuring OSHA compliance or addressing potential workplace hazards, a PEO’s proactive approach helps create a safer, healthier work environment. This not only minimizes the risk of accidents but also supports a more engaged and productive workforce.

By partnering with a PEO, your business can effectively overcome the daunting compliance struggles that many small businesses face, ensuring both safety and legal adherence are managed professionally. This strategic move can safeguard your business from the legal repercussions of non-compliance and contribute significantly to its overall stability and growth.

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Axcet HR Solutions Solves Your Small Business Struggles

As an award-winning, certified professional employer organization serving small and mid-sized employers, Axcet HR Solutions works as a co-employer, assuming responsibility for the full suite of HR services. Axcet’s specialists also can assist with larger organizational development issues like creating mission, vision and value statements, organizational structure review and management strategies.

Axcet HR Solutions offers a full suite of human resources, risk management, employee benefits and payroll administration services to small and medium-sized businesses with fewer than 250 employees. Your people are central to your success, and we specialize in helping small businesses create productive environments that are conducive to better manager/employee relations. Schedule a consultation today to see how we can help with your small business struggles.

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