Wondering how to save your company during a recession?
You're not alone.
A recession spells doom and gloom for many businesses. Lowered sales, shriveling income, and decreasing disposable income characterize a recession, crippling many businesses.
While typical cost-cutting measures can help lower your overheads, switching to energy-efficient bulbs can only go so far. You need a consistent and reliable way to lower your overheads while ramping up revenue generation during an economic downturn.
Partnering with a Professional Employer Organization (PEO) checks both boxes – saves you money and bolsters your revenue-generating efforts. A PEO saves you money right out the gate by providing support for non-revenue generating tasks, including benefits, HR, payroll, and compliance, at a lower cost. The partnership also offers many cost-saving opportunities while giving you a competitive edge.
Dig in as we detail how to save your company a tidy bundle by hiring a PEO to take over the administrative roles during a recession.
Improved Ability to Innovate
Shrinking disposable income during a recession results in declining sales and heightened competition. Typically, this would mean doubling your marketing budget to grow sales in an increasingly hostile market environment. Hiring a PEO can help differentiate your business and lower your marketing overheads.
You now have more time to strategize and develop effective strategies to make your business recession-proof. Instead of running expensive ad campaigns, you can use the time to study the new market environment. Delving deep into the market helps to unveil market gaps, unfilled needs, or opportunities to create new products and services. That means you'll be facing lowered competition while drastically growing your sales.
Lowered Payroll without Layoffs
An economic downturn makes people conscious of their spending habits. With prospects agonizing over every buying decision, it'll take you longer to convert a lead. That would mean more phone calls, emails, negotiations, and more, which can overburden your sales team. The additional effort may require you to spend more on overtime or new workers.
Hiring a PEO can help you deal with this development without a burgeoning payroll. Reliable PEO experts can help you automate repetitive non-revenue generating activities. Free of tedious routine tasks, your employees can put their talents to good use. They can handle their workloads within regular office hours, saving you a fortune in overtime pay.
Improved Employee Retention without Expensive Raises
More than 47 million Americans quit their jobs during the Great Resignation, creating a worker shortage epidemic. Employers were left stranded and unable to fill customer demands. Toxic workplace culture, poor wages, inequalities, lack of work-life balance, and inadequate benefits were commonly cited reasons for mass resignation. Working with a ScalePEO can spare your business a similar fate to help you thrive during a recession.
A PEO can help you streamline your business processes and create an enabling workplace environment. You can create meaningful job descriptions, a vibrant workplace culture, and other perks people treasure at the office. Such measures let you build a team of happy, engaged, and loyal employees. That helps you position your company as a dream employer. Instead of putting out fires associated with high-employee turnover, you'll have top talents knocking on your door.
Affordable Top-tier Benefit Plans
Great pay packages and workplace culture can attract top talent to your business, but great benefits will help you retain them. Most people are attracted to Fortune 500 companies because they offer exceptional benefits packages. Hiring a PEO can help you provide top-tier benefit plans while lowering your monthly costs.
A PEO can help lower your benefit-related costs while providing comprehensive health insurance plans to your employees. You can stand out by offering generous coverage with dental, health, vision, mental, and behavioral benefits. A typical health benefits package costs about $15,000 per employee per year. However, since PEOs service a large group of companies, they can leverage this scale to deliver top-tier benefits plans at a more affordable cost.
Increased Operational Efficiency
Most small companies are unaware of their operational efficiency because they lack a standardized way to benchmark their performance. As such, it's impossible to optimize their performance. ScalePEO's HR Outsourcing service can offer deep insights into your business efficiency. Often working with a PEO is more affordable than hiring an additional human resource specialist.
Besides rooting out the inefficiencies, a PEO can help you eliminate the inefficiencies identified. As experts in human resources, they can help you create a solid company structure, define or redefine the job roles, create an efficient pay structure, and more. If need be, a PEO can help retrain your employees to bolster their skills and knowledge.
Avoid Expensive Legal Mistakes
Unless you're an HR specialist, you're unlikely unaware of your state's wage and hour laws. The Fair Labor Standards Act (FLSA), Worker's Compensation, and OSHA laws protect employees against unfair practices. The FLSA Act details the minimum wage, overtime pay, child employment standards, and record-keeping in every state.
Complying will regulatory requirements lower your business risk profile. You may unknowingly cut corners to save on costs during a recession if you're unaware of the regulations. Unfortunately, contravening compliance laws opens your business to expensive lawsuits, fines, and court fees.
ScalePEO can ensure proper HR paperwork handling, enforce workplace safety protocol, and save your business from costly lawsuits and regulatory violations. Assistance with regulatory compliance from a PEO delivers higher savings than administrative and health insurance coverage.
Are PEOS Worth It Money-wise?
Are PEOs worth it money-wise? Absolutely. Hiring a PEO comes with exceptional money-saving opportunities, even during a recession. Right out the gate, the PEO will lower administrative costs by taking over your benefits, HR, payroll, and compliance roles.
The HR experts will help increase your operational efficiency, including helping with automation, worker training, and creating an enabling working environment. Each of these activities cumulatively helps lower overhead costs while ramping productivity to give you a competitive edge.
A PEO ensures that you operate with a lean workforce by streamlining operational efficiency. Lowered overheads and growing sales ensure sufficient cash flow to cover monthly payroll. The PEO handles the tedious payroll process to let you focus on growing your business. Lastly, hiring a PEO lets you stay on the compliant side of regulatory laws to deliver more money-saving opportunities.
Wondering how to save your business during this recession? Contact us to get started!