{"id":25596,"date":"2021-06-30T08:49:40","date_gmt":"2021-06-30T12:49:40","guid":{"rendered":"https:\/\/www.qgiv.com\/blog\/?p=25596"},"modified":"2021-06-30T08:51:32","modified_gmt":"2021-06-30T12:51:32","slug":"professional-employer-organization","status":"publish","type":"post","link":"https:\/\/www.qgiv.com\/blog\/professional-employer-organization\/","title":{"rendered":"8 Vital Reasons Why Your Nonprofit Should Work with a Professional Employer Organization"},"content":{"rendered":"\n
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Jessica Perkins is a writer and SaaS marketing consultant who helps businesses scale up their marketing efforts. She is obsessed with learning and also is passionate about sculpting.<\/em><\/p>\n\n\n\n

Human resources (HR) is an essential aspect of any organization, as they are instrumental in recruiting, screening, hiring, training, and paying employees. HR professionals keep track of benefits, wages, and help manage employee complaints; their importance is far-reaching.\u00a0<\/p>\n\n\n\n

Many smaller nonprofits don\u2019t have the resources needed to set up an effective and efficient HR department, but if you want to scale your charity, you\u2019ll need one. In this post, we\u2019ll provide 8 reasons why your nonprofit needs some form of HR functionality and how a Professional Employer Organization (PEO) can benefit you from beginning to end. You don\u2019t have to stop using a PEO once your company expands.<\/p>\n\n\n\n

In fact, you may like the flexibility, professionality, and culpability a Professional Employer Organization provides!<\/p>\n\n\n\n

Why are PEOs Important for Businesses? <\/h2>\n\n\n\n

Professional Employer Organizations are stand-ins or replacements for an in-house HR department. An HR department has three main objectives in an organization: hire employees, train new hires, and maintain worker happiness. If these duties are performed optimally, and to the satisfaction of your employees, you\u2019ll have a workforce that\u2019s productive and efficient.<\/p>\n\n\n\n

Without a way to professionally screen, interview, or hire employees, you could onboard staff that aren\u2019t fit for the job. Problems don\u2019t stop there: What if you hire using an unlawful process? What if you consistently miss paychecks? What if you only have one HR professional and they take a vacation or catch a cold? Then, you might have a lawsuit on your hands. <\/p>\n\n\n\n

On top of that, unhappy or poorly trained employees could lead to an increase in customer complaints. While some mistakes won\u2019t cause legal issues, disgruntled employees will affect your bottom line. Disgruntled employees cost the U.S. up to $550 billion a year<\/a>, and adding an HR representative, PEO or otherwise, will prevent your non-profit from hemorrhaging money.<\/p>\n\n\n\n

8 Reasons Why Nonprofits Should Hire a Professional Employer Organization Immediately\u00a0<\/h2>\n\n\n\n

Let\u2019s take a more in-depth look at how a Professional Employer Organization can benefit your small-large non-profit.\u00a0<\/p>\n\n\n\n

1. Gives Employees Access to Cost-Effective Comprehensive Benefits<\/h3>\n\n\n\n

Nonprofits that entirely staff employees will need a PEO to provide them access to a benefits plan. Employers will have typical benefits, like medical, dental, or vision coverage, a flexible spending account, or disability and life benefits, but volunteers won\u2019t typically receive a benefits plan. Volunteers usually earn taxable compensation from stipends, not benefits.<\/p>\n\n\n\n

Regardless, PEOs will explain to your employees how to use enrollment tools and choose between a plan that suits their needs. An outsourced HR department is able to negotiate with carriers, handle COBRA administration, and enroll employees into their benefits packages.<\/p>\n\n\n\n

2. Streamlines and Automates the Payroll-Process<\/h3>\n\n\n\n

As your non-profit grows, the payroll process will become more complicated, which will force your HR employees to work longer hours on the same task. PEOs can decrease your accounting costs and payroll processing by automating and streamlining workflow. To save big on this feature, find a PEO that provides a total fee and doesn\u2019t separate based on services.<\/p>\n\n\n\n

3. Costs Less Than Administering HR In-House<\/h3>\n\n\n\n

Some businesses will avoid hiring a PEO agency due to the hefty charge that comes with the service, but the cost of a PEO varies by the number of employees<\/a> you have and not based on work scope. Typical PEOs will cost 2-12% of wages, which is much more inexpensive than the revenue loss you may incur from legal issues. On average, you\u2019ll save 35% on HR costs.<\/p>\n\n\n\n

4. Provides Access to Retirement Savings Plans<\/h3>\n\n\n\n

Non-profit employees have access to incredible retirement savings programs and 401k plans, but without an HR department, they won\u2019t have access to their best options. Small businesses would benefit from a PEO that sponsors a 401k, allowing employees to defer compensation for employment. PEOs can set up other contributions, like employer matching.<\/p>\n\n\n\n

Similar to the help a PEO can provide with other benefits, an agency can provide educational information and an online portal to ensure employees are taking advantage of their options. <\/p>\n\n\n\n

PEOs are capable of managing regulatory requirements, like the distribution process and compliance testing, and administrative responsibilities related to retirement savings plans.<\/p>\n\n\n\n

5. HR Compliance Will Avoid Employment Legal Issues<\/h3>\n\n\n\n

Employment and volunteer laws can change at a moment’s notice, and it\u2019s difficult for businesses to keep track of legal compliance while doing everything else. While a simple payroll process would be ideal, federal and state agencies must change to ensure equality and equity.<\/p>\n\n\n\n

Unfortunately, ignorance can\u2019t be used as an excuse, and the government will fine you regardless of your reason for breaking the law. If you\u2019re not current or want to keep researching each rule and regulation that pertains to employment law, PEOs will keep you compliant.<\/p>\n\n\n\n

Even if you\u2019re positive your business is up-to-date, you\u2019ll still need to consider other laws.<\/p>\n\n\n\n