What was once a battle between fierce competitors for payroll business has now become a rush for partnerships in the PEO services space. PEOs have always had the competitive advantage of having more to offer than just payroll processing. HR outsourcing services are growing in demand as the small and medium-sized business continues to change the employment landscape and tries to stay competitive.
For startups and SMBs, competing for top talent was always a challenge. Talent wants great pay and almost always excellent benefits. For small businesses looking to grow, typically, this is where they lose out. That is until PEOs started gaining credibility as a cost-effective way to offer benefits.
Accountants Are An Entrepreneurâ€™s First Financial Advisors
When a business is new, very often, it is the accountant of record that becomes an entrepreneur’s financial advisor. Entrepreneurs need to know how to use their capital to grow and also how to save the most capital they can so they can grow. This puts accountants in a unique position of being able to assist their customers in ways that are even more beneficial than just filing taxes can keeping books.
Lots of accountants have relationships with add-on service providers that their customers like to use; namely payroll processing services. For the accountant, it is an easy thing to recommend. Their customers need to stay compliant with payroll and payroll tax laws. Reports from payroll processing companies are easier to do taxes with later, so it ends up being a win-win for all parties.
Conversation accountants are having with their entrepreneurial customers is changing in the last few years. It has to. Their payroll processing partners are buying PEO services to offer HR Outsourcing solutions. Itâ€™s high time the accounting side of the house became more aware of why it makes financial sense for their customers to work with a PEO.
There Is More To PEOS Than HR Outsourcing
Some larger payroll processing companies lost out when it came to trying to capture PEO business. Simply tacking on partners who could offer more than just payroll processing didn’t fill the void. As SMBs got savvier, the need for more became evident to payroll companies, such as Paychex. In the last year, Paychex has acquired not one, but two PEO companies. These acquisitions position Paychex to be the one source for HR Outsourcing for its current and prospective customers.
Why do companies see such an advantage to using HR Outsourcing services? Itâ€™s pretty clear; you can keep yourself out of a lot of unnecessary trouble by utilizing professional services to help you grow, instead of trying to source it all internally. Letâ€™s face it; headcount is costly. What it takes to fully staff an HR Department, offer and manage benefits, and pay for payroll processing becomes expensive. Not to mention, when you donâ€™t know what an HR manager should know to keep you compliant, you are taking risks. Most small businesses are not well-positioned to deal with fines and lawsuits. HR Outsourcing takes away the risks associated with employing people.
How did it work out for PayChex to acquire Oasis so they could build upon their already existing PEO offerings? Reports out so far show that while Paychex revenue is up only 4% overall, their PEO Services revenue is up at 67%! How is that for growth? The news makes it clear; SMBs want HR Outsourcing solutions, and they want it all packaged in one bill. PEO Services is the right move for accounting clients who have employees.
If youâ€™d like to know more about how PEO services can help you add to your bottom line, and help your customers grow by retaining more capital to reinvest in their businesses, contact us today.