Understanding PEOs and Their Role in Workplace Transformation

Professional employer organizations, or PEOs, can play a pivotal role in transforming the workplace, particularly for small and medium-sized businesses. A professional employer organization is a way to outsource HR functions through a co-employment model.

By outsourcing human resource functions, companies can focus on their core operations while benefiting from enhanced HR administration and employee satisfaction. Businesses are empowered to begin a PEO workplace transformation.

This article will explain how PEOs function as strategic providers for driving positive change in HR and facilitating workplace transformation.

What Is Workplace Transformation?

Before we dive into how PEOs help drive change, it's important to define workplace transformation, especially in the context of HR.

Workplace transformation is generally centered around the process of enhancing a workplace for employees by changing its technology, environment and processes. The goals for transformation can vary according to the business, but they often include enhancing efficiency, increasing collaboration, and promoting innovation.It involves rethinking what we understand to be "traditional work" and adopting new technologies to create a more flexible and interconnected work experience. This might include embracing remote work, flexible work schedules, collaboration tools, and digital transformation.

The Impact of PEOs on Change Management and Organizational Change

Change can be hard, and businesses must deal with it constantly. PEO workplace transformation can help businesses so they can build an agile workforce — an employee base that can adapt to change using their skills and flexibility.

PEOs can make it easier to handle change management while maintaining business continuity. Their role is particularly beneficial for small and medium-sized enterprises (SMEs), which may lack the resources to manage the many challenges effectively.

Key contributions of PEOs in change management

Let's review some of the most important ways a PEO can help businesses with workplace transformation.

• Streamlined HR functions. PEOs can help handle critical HR tasks such as payroll processing, benefits administration, and compliance support. This allows businesses to focus on strategic initiatives rather than getting bogged down by administrative tasks. By relieving these burdens, a PEO system frees up time for leaders and workers alike to deal with changes. Companies can be more responsive to market shifts, new opportunities, competitor challenges, technology upgrades — any changes for positive or negative.
• Enhanced compliance support. Navigating compliance with employment-related rules and requirements can be daunting, especially for SMEs. The U.S. Department of Labor (DOL) alone administers over 180 federal-related rules and requirements. PEOs can provide expertise on compliance amid constantly changing employment-related rules and requirements. This support mitigates risks associated with non-compliance. Managers can navigate many compliance concerns, which helps to lighten what is on their plates and promote fairer and safer workplaces, and businesses can also mitigate costs and bad reputation that may result from non-compliance.
• Access to expertise. PEOs employ seasoned HR professionals who can support businesses through organizational changes. They can assist with change management strategies, help with assessments and support transitions during restructuring or growth phases. This expertise is invaluable for organizations looking to implement changes effectively while minimizing disruption.
• Flexibility and scalability. As organizations grow or pivot their strategies, their HR needs evolve. PEOs offer scalable solutions that can adjust to changing business requirements, whether it involves expanding into new markets or adopting new technologies. It can be easier to quickly upgrade a PEO services agreement than to hire new HR staffers or teams. This flexibility helps the workforce stay aligned with the organization's goals during periods of transition.
• Enhanced employee engagement and satisfaction. PEOs can enhance employee engagement and employee retention by providing access to benefit packages that are often more competitive than those available independently to SMEs. By prioritizing employee well-being and offering support for programs like mental health resources and flexible work arrangements, PEOs can help organizations foster a positive work environment. Employees value work-life balance, and by making it a priority, businesses can demonstrate their appreciation. This can ease the stress associated with organizational change.

Enhancing Financial Performance and Cost Efficiency Through Strategic Planning

PEOs can provide strategic planning services that enhance both performance and cost efficiency, boosting bottom lines. By leveraging their valuable expertise and command of innovative technologies, PEOs offer significant advantages to their client companies.

Enhanced employee retention

Employee turnover can be costly. The cost of replacing an employee can be one-half to two times the employee's annual salary, according to Gallup. High turnover rates can lead to decreased productivity, lower morale among remaining employees, and even damage to a brand's reputation.

A PEO can provide SMEs access to helpful HR services and resources to help enhance  overall employee retention. Research shows that employee turnover is 10% to 14% lower for PEO clients compared to small businesses that don't use one. PEOs can help to cultivate a shift in workplace culture by:

• Streamlining talent acquisition.
• Providing skill development tools for employees.
• Accessing leadership development services.
• Opening access to competitive benefit packages, including health insurance, retirement plans, and other perks that employees may care about.

Scalability and flexibility

As businesses grow, their HR needs evolve. PEOs offer scalable solutions that adapt to changing requirements.

This enables companies to support and foster future growth without needing to make significant investments in internal HR infrastructure.

Leveraging automation and technology

In today's fast-paced business environment, businesses are under constant pressure to improve operational efficiency. A PEO can help them do this by leveraging automation and technology integration.

A PEO can be a great choice for SMEs looking to use up-to-date technology to optimize costs and keep their competitive edge. For example, PEOs can provide human resources information systems (HRIS) to automate the many mundane but essential tasks involved in payroll processing. The PEO takes care of maintaining state-of-the-art software and updating it regularly. It also can provide crucial performance metrics to help clients make informed decisions and enhance workforce management with agile methodologies.

Examples of Successful Workplace Transformations

Businesses are constantly striving to enhance workplace satisfaction and efficiency, many by outsourcing HR functions to a PEO. Here are a few examples that show why.

HarvestIQ

A California startup that specializes in risk management solutions for agriculture and livestock wanted to transform its approach to remote teams and benefits. As the company expanded across six states with remote workers, it became more difficult to follow compliance requirements. Managers strained to handle the complex rules while preserving HarvestIQ’s unique company culture.

TriNet PEO's expertise of employment-related rules and requirements, as well as services for remote workers, gave the company's leadership their time back. The PEO also enhanced the HR and people management experience for employees. They enjoy the robust platform that helps streamline processes like onboarding, the access to competitive benefits that meet the needs of their employees, the 24/7 support, and more.

Crosslink Capital

This early-stage venture capital company needed to focus on profit and scaling without worrying about HR tasks. TriNet’s PEO solution and expert best practice guidance freed up Crosslink's founders and team to prioritize finding new, cutting-edge companies and supporting their portfolio. The company also urges the companies it invests in to outsource HR to a PEO as a way to stay nimble and adaptive. Outsourcing HR to TriNet at the onset of the investment lays the foundation for rapid growth and minimizes potential HR issues and complexities down the road, according to Joseph Guzel, Principal at Crosslink Capital.

Greycroft

This seed-to-growth venture capital firm focuses on investments in consumer and enterprise technology companies. The Greycroft team includes professionals based in New York City and Los Angeles — two areas with some of the most complex employment-related rules and requirements. TriNet’s HR experts and robust technology platform allow Greycroft to spend less time navigating payroll tax requirements, workers’ compensation, benefits compliance and varying employment-related rules and requirements, and more time on empowering their entrepreneurs to execute on their vision.

Many of the small companies Greycroft works with don’t have the resources for an internal HR team. Greycroft’s director recommends TriNet to these businesses as a comprehensive HR solution so they can gain access to premium benefits for their team and compete with larger companies for top talent.

Achieving PEO workplace transformation

TriNet's PEO services can help companies transform their workplaces by streamlining HR functions, supporting compliance, providing expert best practice guidance, offering flexibility, and enhancing employee engagement. PEOs like TriNet empower businesses to navigate change effectively.

This support not only helps mitigate risks but also positions organizations for sustainable growth in a highly competitive business landscape.

Reach out to TriNet today for industry tailored solutions for your modern workplace!

This article is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.

This article may contain hyperlinks to websites operated by parties other than TriNet. Such hyperlinks are provided for reference only. TriNet does not control such web sites and is not responsible for their content. Inclusion of such hyperlinks on TriNet.com does not necessarily imply any endorsement of the material on such websites or association with their operators.