Layoffs, hiring freezes, bonus eliminations and pay reductions. For many U.S. workers, 2009 is not off to an auspicious start. According to recent statistics from the Society for Human Resource Management (SHRM), 48% of companies laid off employees in 2008, and 60% of organizations surveyed said they expected to lay off employees in the next year.
Current economic times have led many businesses to turn to Professional Employer Organizations (PEOs) for help in two key areas: outsourcing employment administration and liabilities; and enhancing employee morale.
PEOs manage human resource activities for a growing number of firms, providing benefits administration, payroll and tax compliance duties, to name just a few. As businesses pare down staff in the human resources and administration areas, the ability to outsource this function comes at a critical time. Outsourcing frees up valuable time for employers to focus on growing their businesses.
Many small- and mid-size companies are projecting a difficult year ahead and are looking for opportunities to maintain a positive work environment for their employees. With gloomy forecasts for 2009, many companies may not recognize that they can realize substantial benefits by partnering with a PEO. Small and mid-size companies in particular have discovered they can gain new perks for their employees – at a time when many of their peer companies are cutting back or letting people go.
Where many companies are forcing their employees to begin paying higher health insurance premiums, new clients of Genesis Consolidated Services, for example, find that they are able to offer their employees a broader range of benefits, creating the opportunity for employees to pay lower premiums once they become a PEO partner. This is a strong morale-building opportunity.
New clients of a PEO also find that they are able to begin offering new benefits, such as 401(k) plans. Many smaller firms have historically been unable to provide any 401(k) benefits on their own because of prohibitively expensive administrative costs. By partnering with a PEO, however, small firms are able to offer their employees an additional benefit at a time when retirement savings are of paramount concern.