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The value of a PEO in a crisis: 9 benefits


Whether due to pandemic, natural disaster or an act of violence, a crisis can send an operationally sound business into distress with little warning.

That’s why it’s important to understand the immense value of a professional employer organization (PEO) in a crisis.

What’s the value of a PEO in a crisis?

The COVID-19 pandemic created a very uncertain business climate. In the past, we’ve seen companies face serious disruptions following the 9/11 attacks, the global financial crisis as well as several major hurricanes and wildfires.

Crises can occur at any moment and company leaders often need to make weighty decisions in a short amount of time. Reliable business advisors and efficient internal processes are critical in these moments.

A PEO can provide you with both.

Specifically, a PEO’s HR outsourcing services help you:

  • Take care of your people during a crisis.
  • Support you through any new employer-related administrative and compliance burdens.

As a result, you may find it easier to focus more fully on navigating the financial impact of the situation and connecting with your customers.

The PEO model is battle-tested and optimal for times of turmoil. Here are nine areas that demonstrate the immense value of a PEO in a crisis.

1. Foster business continuity

Even during times of crisis, a reputable PEO will have systems and processes in place to help its client companies maintain business as usual.

For example, if you face a technology disruption in your offices and you have an engagement with a reliable PEO, the PEO will continue to handle or provide:

  • On-time payroll processing
  • Ongoing benefits and leave administration
  • Timely help with employee relations issues

Without that support, it’s up to you to overcome any sudden obstacles that keep you from paying your employees as expected or that keep them from accessing and using their benefits.

2. Inform you of regulatory changes

It’s common to see new legislation emerge during or after a crisis that affects employers.

For example, small businesses may suddenly be required by law to provide additional employee benefits (such as emergency paid sick leave).

PEOs monitor and analyze changes in employment laws and regulations. They follow HR-related regulatory changes to decipher what they might mean for your business and then provide tools, resources or guidance on how to achieve compliance and mitigate the HR-related risks.

Many find HR compliance burdensome during normal times. In a crisis, it requires even more diligence. Without a PEO’s support, business owners must keep this responsibility in their mental load and find ways to stay informed and compliant on their own.

3. Provide guidance on keeping employees safe

If you use the services of a PEO, as co-employer, they will be invested in helping you keep your workers safe. This is especially true in a crisis.

A good PEO can help you understand guidelines from the Occupational Safety and Health Administration (OSHA) and Centers for Disease Control and Prevention (CDC).

Many PEOs will also provide client organizations with additional resources designed to keep your employees out of harm’s way, such as comprehensive safety checklists and sample disaster preparedness and illness prevention plans.

4. Help you communicate clearly with employees

Decision-making in a crisis is tough, and often, there is little time and energy left to devote to how you’ll communicate your decisions to your employees.

But your responses to a fear-inducing situation can come to define your leadership in the minds of your team members. Certain situations can leave you at a loss for words. What’s the right thing to say when you don’t know what to say. That’s another reason why it’s great to be connected to a PEO during a challenging time.

Many PEOs provide written templates for their clients that show them suggested ways to communicate with their employees in various scenarios.

For example, as a PEO client, you may have access to sample emails or text messages to use when announcing weather-related business closures to your employees.

It seems simple, but in an urgent time, having well-polished talking points ready to borrow can be a huge relief. Not only does this allow you to devote yourself to other more pressing demands, but it also helps ensure you come across as collected and professional despite the strain you may feel in the moment.

5. Offer guidance on managing a remote workforce

Sometimes a crisis prevents travel to the office. A PEO can help organizations determine if remote work is a good solution to implement for a few days or even a few months in a prolonged crisis.

If you decide to allow telecommuting, a PEO can guide you on how to manage remote employees successfully and how you can direct employees working flexible schedules.

6. Help you adjust policies and procedures

New legislation and new ways of working during a crisis might sometimes mean you need to write new HR-related company policies or procedures.

The HR specialists at a PEO can help you:

  • Determine whether any policy changes should be temporary or permanent
  • Get the wording right
  • Help you make sure that your policy complies with applicable laws and regulations
  • Announce the changes to your employees
  • Update your employee handbook if needed

Creating HR policy on your own requires that you spend a lot of time researching, writing and wondering if you’ve missed anything. Crafting policies with a PEO on your team gives you the full resources of their web of experts who will apply HR best practices to your specific situation.

7. Help you increase operational efficiency

Depending on the amount of disruption to your business in a crisis, you may face the need to increase operational efficiency, freeze hiring or sometimes lay off employees.

Again, a PEO’s HR specialists can help you look at your organizational chart and assist you with how to best allocate resources to be more efficient.

Then, if needed, a PEO can help you consider whether to implement a hiring freeze or temporary or permanent layoff. They can guide you in the best ways to communicate your choices with any affected employees and address your concerns along the way.

8. Oversee unemployment administration

If you do need to lay off some of your workforce in a crisis, a PEO steps in again to oversee unemployment administration for your business. That includes processing notices from your state unemployment agency and either accepting or contesting claims.

This help can add up to a lot less paperwork for you in the moment and may be especially welcome if an employee’s eligibility for unemployment is unclear.

9. Help you rehire employees

If you plan to rehire employees after a temporary layoff, a PEO can help you develop your rehiring strategy.

You’ll have specialized advice on how to reinstate your employees and best practices for onboarding them a second time back into your organization.

Sustaining success

We’ve lived through enough unpredictable crises in the United States to know that the most recent one won’t be our last. Partnering with a PEO helps set your business up for long-term sustainability and success in good times and in bad.

To understand the business impacts of the COVID-19 pandemic on its clients and related client concerns, Insperity surveyed business leaders across a variety of industries from its base of Workforce Optimization® and Workforce Synchronization™ clients throughout the United States. See how we’ve helped our clients during this crisis.