The Role of Professional Employer Organisation in Business Growth

Is handling HR functions for your employees becoming a tedious task for you? Finding it difficult to comply with the changing payroll and taxation laws? It's time you think out of the box by seriously considering a Professional Employer Organisation (PEO) as your strategic HR partner to lighten your workforce management load. They act as the top staffing company in India to help businesses unlock untapped growth potential.

Many businesses like yours are flourishing in today's competitive business landscape by optimising their operations, reducing risks and gaining access to a plethora of HR services. PEOs come with the required expertise and resources to help businesses streamline their operations, adhere to changing employment laws, gain better benefits packages, and emphasise growth and innovation.

In a nutshell, these organisations can help their clients manage the workforce, easily and effectively.

Defining PEOs

PEOs are specialised entities that forge collaborations with employers to take ownership of their entire HR operations - Hiring, Onboarding, Training, Performance Management, Payroll and Legal Compliance, etc.

Through this strategic partnership, employers can outsource critical HR functions such as employee benefits, payroll administration and employment taxes. One can say PEOs are professional employers for the employees they source/manage for their clients. Client organisations use PEO's Federal Employer Identification Number (FEIN) to report the wages of their employees. What it does can transfer the employee liability to the PEO.

This strategic arrangement ensures a significant advantage to client companies as they can receive several benefits while achieving cost efficiency owing to the economies of scale.

A Look at the Working Methodology of PEO Services

Sometimes the client company approaches the PEO or sometimes the latter approaches the former for strategic HR partnerships. Whichever way the process pans out, the core is that PEOs take charge of hiring employees and put them on their payroll. Upon onboarding, the sourced employees become the EOR, which stands for Employer on Record, for PEOs.

What Happens Next?

The employees sourced by PEOs receive Key Performance Indicators (KPIs) from client companies. However, these employees work as per the HR guidelines PEOs set for them. PEOs manage essential tasks such as employee payroll and compliance, enabling their clients to focus purely on expanding their businesses. However, the extent of HR function outsourcing depends on the specific agreement and PEOs' offerings. Since PEOs differ in terms of their operational scale, the extent of HR function outsourcing will differ. Some will manage only hiring and onboarding, some will do payroll management and some will do all. The extent of outsourcing will decide the extent to which HR functions will be streamlined.

KRAs of PEOs in India

To make it more comprehensible, we have elaborated the key roles and responsibilities of PEOs in greater detail below. Check it out!

Assistance for Hiring and Onboarding

PEOs act as a catalyst for hiring and onboarding candidates using their talent and expertise. They can play a crucial role in identifying and recruiting talented individuals and streamlining the overall process.

Risk Mitigation and Adherence to Compliance

India’s specific labour laws and regulations make it necessary for organisations to adhere to. Failing to do so can bring in penalties and unwanted hassles for them to deal with. This is where PEOs step in by creating comprehensive employee handbooks, managing employee retention, developing policies, and ensuring a seamless documentation process.

Payroll Management and Compliance

PEOs efficiently manage and process payroll for employees. They extend help in accurate salary calculations and tax filings, preventing organisations from facing such unwanted burdens.

Improved Efficiency

Forging partnerships with PEOs allows businesses to streamline employee payroll benefits, candidate onboarding, tax management, etc. These experts ensure flawless compliance with regard to each of these and make businesses focus on what matters - expanding the business. What’s more, they ensure all that within the stipulated time frame.

Conclusion

In today’s competitive business landscape, organisations are increasingly collaborating with PEOs to navigate the challenge of workforce management successfully. Each step of the HR process can be complicated owing to the complexities attached to the same. No matter whether it’s hiring or payroll management, rules can change all of a sudden, leaving organisations stunned. PEOs thus use their expertise to ensure all that goes smoothly. As a business enterprise, if you are looking out for a credible Professional Employer Organisation, consider joining hands with Kutumbh HRCare (Kaam matlab Kutumbh), a Noida-headquartered organisation serving a wide range of client companies across industries.