When to Outsource Your HR

Growth is what every business and business owner strives for. However, there comes a point where even growth throws everything off kilter. Going from a small crew to a big team, expanding into new states, and hiring people who work from home is all well and good, but it can also create massive headaches with HR. What used to be a simple matter of paying the crew and having some basic rules now turns into a minefield of compliance issues.

HR is the first place things start to get bogged down when you start growing. People start asking questions about benefits, and if you've got employees spread out across several states, you can bet your bottom dollar you're going to be lost on the tax stuff. Before you know it, the guy in charge of the office or the COO is juggling HR tasks alongside all the other things they were already doing. And for many businesses, it's at this point that they decide to bring in a professional employer organization (PEO) to handle HR. Choosing the right PEO, however, is just as important, and that's why companies are increasingly turning to PEO brokers to help guide them through the selection process.

Key Takeaways

• Growing businesses often reach a point where managing HR internally is no longer sustainable

• Outsourcing HR can help relieve administrative burden and reduce compliance risk

• PEOs provide HR support while allowing businesses to retain control of their workforce

• Not all PEOs offer the same level of service, flexibility, or scalability

• PEO brokers help businesses evaluate options and choose the right PEO for their needs

When to Outsource HR as a Growing Business

If you find yourself spending an entire week on HR tasks or getting stressed out by all the compliance stuff, then it's time to start thinking about bringing in some help. Consider some of the following warning signs that tell you your HR capacity has maxed out:

• You’re spending multiple hours each week on HR paperwork

• Compliance tasks feel confusing, overwhelming, or easy to fall behind on

• You’re unsure whether your policies match current state or federal laws

• Payroll, benefits, or employee records keep getting delayed or corrected

• Hiring takes longer than it should because onboarding is disorganized

• Employee issues are handled reactively instead of with clear processes

• You’re worried about making a mistake that could trigger fines or legal trouble

• Managers keep coming to you with HR questions you don’t have time to answer

• HR tools, files, or systems are scattered and hard to track

• You’ve outgrown “doing it yourself,” but haven’t built an internal HR role yet

Why Do Companies Use a PEO

A good PEO is not just an HR task manager but a strategic partner. Through a co-employment model, the PEO becomes the employer of record for tax and benefits purposes, while you still keep the reins on hiring, company culture, and all the other stuff that matters. This partnership gives you the HR infrastructure of a big company without the overhead of hiring a whole team of HR pros.

PEO brokers help growing companies by:

• Providing side-by-side provider comparisons with transparent pricing, service levels, and compliance capabilities across multiple PEO options

• Reviewing contracts and identifying hidden fees like early termination clauses, service caps, implementation charges, and bundled markups

• Negotiating optimal pricing and terms by leveraging established industry relationships and market knowledge

• Matching PEOs to your growth stage by understanding which providers scale effectively as you add employees and expand geographically

• Supporting smooth onboarding or transitions to ensure payroll continuity and minimize employee disruption

Why Choosing the Right PEO Matters

Not all PEOs are of the same quality. Some charge per-employee fees, others charge a percentage of your payroll. Some have fancy tech platforms but lousy customer service. And some just can't handle it when you grow beyond a certain size.

Some of the key differences between PEOs include pricing, benefits, compliance, tech capabilities, and service levels. For companies that are growing fast, the differences between a good PEO and a not-so-good one really start to show over time. A PEO that can't put together a decent benefits package won't be much help in a tight labor market. And poor compliance support can be a major problem if you're expanding rapidly into new states, and you're not really set up to handle it. Plus, with outdated technology, you're just going to slow your team down as they try to use out-of-date HR tools.

How PEO Brokers Help Growing Businesses Make Smarter Decisions

Comparing PEO providers fairly is almost impossible if you don't know what you're doing. PEO contracts are like a maze, and the pricing isn't always super clear. Often, providers are really good at some things but not others. 

A PEO broker is kind of like an independent advisor. They're not PEOs, so they don't have any agenda other than helping you find the right fit. Unlike working with a PEO sales team, a PEO broker for growing businesses will look at operations as a whole and find a PEO that matches your specific needs based on your stage of growth, the industry you're in, where you operate, and your company culture.

Outsource Your HR Without Any Disruption

If you're evaluating HR outsourcing options or considering a switch from your current PEO, consult with a PEO broker to get insight and tailored assistance.

Align PEO can help simplify that decision. We assess your needs, compare the right options, and match you with PEO partners that align with your business today and where it is headed next.

If you are evaluating HR outsourcing options, learn more about what to look for in a PEO or explore how PEO brokers help growing companies make better decisions. When you are ready, we help you find the right PEO partner with minimal disruption to your day-to-day operations.