The Changing Nature of Hiring

October 22, 2021

The Changing Nature of Hiring:

The last 2 years have been challenging for Human Resources and staffing teams at companies of all sizes. The pandemic had a significant impact on hiring strategies of companies and has drastically changed the approach to remote working. As economies start to recover, companies are starting to expand their workforce with fresh hiring. However, given continued uncertainty, companies need to be flexible in their staffing strategies, while also being able to ensure their hiring teams are adequately supported.

For companies that have manpower needs when entering new markets, the economic uncertainty makes it difficult for them to commit to hiring a large number of permanent employees. Professional Employer Organizations (PEOs) are a cost-efficient staffing solution to address these human resources and staffing needs with flexibility. PEOs play a vital role in ensuring businesses of all sizes can reach their business goals by deploying an effective and efficient workforce tailored to their needs.


What is a PEO?

A PEO is an organisation offering a complete suite of staffing solutions to not only identify the right talent, but also manage, nurture and support individual employees as a legal employer on behalf of a company. The PEO will second the hired personnel back to the company under a service contract as per the company’s requirements. The key element of the PEO solution is the co-employment relationship. As a co-employer, the PEO takes on the employer’s obligations, while providing end-to-end HR management and administration services based on the company’s staffing requirements.

The PEO assists the company for all aspects of staffing, right from recruitment and onboarding to managing terminations and outlays. The client retains full control over the employees, as well as taking the hiring, managing, and firing decisions. PEOs knowledge of local employment regulations, coupled with their recruitment service, enable employers to prosper by removing the burden of administrative tasks and reducing costs and overheads. The PEO offers professional and hassle-free recruitment service and use its network and e-recruitment platforms to hire quality staff.


What do businesses gain from engaging a PEO?:

PEO firms offer companies with a range of benefits that not only improve the hiring process, but also support the company’s bottom line. It has been shown that businesses using PEO tend to grow up to 9% faster, while having nearly 14% lower employee turn-over than business who don’t use PEO. This means the companies survive for longer and have higher profitability and employee satisfaction[1].

Many small and medium sized businesses, including technology startups, are bootstrapped and operate on a tight budget. With limited resources, these businesses’ have to focus on honing their business operations and products to establish themselves in the market. Such businesses typically have small in-house HR teams who deal with a heavy recruitment load. The HR team tends to be constantly under-resourced and overwhelmed. By shifting the administrative tasks to the PEO, management can help ease the Staffing team’s burden, while focusing on growing the business.

Although PEOs are ideally suited for SMEs, large corporations can also leverage PEOs to streamline their operations, while making their organizational structures less bulky. This reduces administrative workload of the HR department, allowing them to focus on the more important tasks such as workforce planning, training and talent development.


Key Benefits of a PEO:

Utilizing a PEO can save substantial time and reduce hassle, while lowering the costs of HR implementation and maintenance for a small business. PEOs manage HR-related administrative tasks, such as payroll, employees benefits and tax filing, etc., in a more organized and cost-efficient manner. Furthermore, PEOs give SMEs the advantages of scale that typically are available to bigger companies with larger budgets. They can handle all major elements related to employee benefits, ranging from finding the appropriate benefit partners to handling the contract with the partners. They will also handle employee communication regarding benefits.

On a global scale, international PEOs enable companies to hire employees anywhere in the world quickly and compliantly, without the need of establishing a foreign legal entity. In other words, businesses can expand abroad through a PEO partnership to build a remote team without the upfront capital expenditure required to have a physical presence in the country, saving both time and money.

Employer compliance is another important aspect of business ownership. Employment regulations can change dynamically and are unpredictable in the current economic climate. Close attention must be paid to regulations governing payroll, tax policies and employee rights and it can be overwhelming for employers to always stay on top of compliance rules. A PEO can simplify compliance matters by taking over the complete obligations from the company.

HR departments can focus on core functions such as employee development, training and engagement, while leaving the burden of administration to the PEO and staffing firms. The PEO can assist the company management in reviewing and adjusting their HR strategy, steering them towards sustainable growth and long-term success. Implementing a PEO strategy not only benefits the company, but is also helpful for candidates enabling them to find and capture the best roles suitable to their profiles.


Major Considerations for selecting a PEO?

Like choosing any other outsourcing firms, the PEO should possess the right expertise and experience, and the services that it provides should match the needs and goals in both short and long term. In general, an eligible PEO should have the experience and infrastructure to quickly adapt to employee needs. It needs to be well versed with governmental policies and possess a deep knowledge of local market and consumer behaviour. There are a range of aspects that companies need to evaluate the PEO on. These include:

  • What HR services does the PEO offer?
  • What kind of skilled professionals does the PEO have access to?
  • Is the PEO proficient in creation and management of databases and reports?
  • How can the PEO tailor its services to fit business needs?
  • Does the PEO have a team well trained in knowing local labour laws?
  • What technology solutions, such as an employee self-service portal, does the PEO offer?
  • Will the PEO service be able to meet the growing needs of business expansion?


The Way Ahead:

The PEO industry has developed into a flourishing industry in the past few decades. It is expected that an increasing number of companies, both big and small, will turn to PEOs for a range of needs. This includes utilizing services for streamlining their HR operations, reduce administrative burdens, be agile in the fast-changing business environment and to have the flexibility to scale up and down quickly. By providing comprehensive HR and staffing services, PEOs help businesses improve operational efficiency by taking care of HR matters, and hence allow them to concentrate on core business activities and strategic goals.

Learn more about TSS, the award-winning Staffing Solutions Platform at


Topics: HR & Payroll Services, Staffing Solutions, Professional Employer Organizations, PEOs

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