Technological upheaval from AI, an uncertain US and global economic outlook, geopolitical risk and catastrophic climate events continue to expose businesses to the threat of constant disruption. Many of these macro risks are structural so how are companies preparing for these uncertainties? Moreover, amidst these macro trends, businesses continue to grapple with the challenges of managing costs, navigating regulatory compliance, and retaining top talent. During these uncertain times, partnering with a Professional Employer Organization (PEO) can provide a strategic advantage, offering businesses a range of benefits to help them weather the various economic storms. In this blog post we dive into some of these macro challenges business faces. We’ll suggest a few strategies for companies to strengthen business resilience and improve workforce management strategies by leveraging leading PEO and Global Payroll providers such as Deel.
Managing Through Constant Disruption
Business resilience refers to an organization’s ability to anticipate, prepare for, respond to, and adapt to disruptive events or changes, minimizing their impact on operations and ensuring the continuity of critical business functions. It is a proactive and strategic approach that enables organizations to withstand and recover from various challenges, such as natural disasters, cyber-attacks, supply chain disruptions, economic downturns, or regulatory changes.
The importance of business resilience has become increasingly evident in today’s volatile and uncertain business environment. Organizations that lack resilience can face significant consequences, including financial losses, reputational damage, customer dissatisfaction, and even business failure. On the other hand, resilient organizations are better equipped to navigate through crises, maintain operational continuity, and emerge stronger from adversity.
According to the Federal Emergency Management Agency (FEMA), 75% of small businesses do not have a disaster plan in place. Additionally, 25% of businesses fail to reopen after a disaster. Knowing the basics of business resilience is critical and involves several key elements:
- Risk assessment and planning: Identifying potential threats and vulnerabilities, and developing comprehensive contingency and continuity plans to mitigate risks and ensure the availability of critical resources.
- Organizational agility: Fostering a culture of adaptability, innovation, and continuous improvement, enabling organizations to quickly respond to changing market conditions and customer needs.
- Supply chain resilience: Ensuring the robustness and flexibility of supply chains, diversifying suppliers, and implementing strategies to mitigate disruptions in the flow of goods and services. Ongoing trends in nearshoring and reshoring suggest companies remain risk-averse to current geoeconomic trends. In a 2022 survey by McKinsey, 81% of businesses survey had implemented some form of dual sourcing strategy versus 55% in 2020.
- Cybersecurity and data protection: Implementing robust cybersecurity measures and data backup strategies to protect against cyber threats and data breaches, which can severely impact business operations. Over 40% of cyber-attacks happen to small businesses with an estimated 30,000 websites hacked daily.
- Employee preparedness and engagement: Providing training and empowering employees to respond effectively during crises and fostering a culture of resilience throughout the organization. Today numerous technologies exist to scale knowledge dissemination throughout an organization for both external and internal stakeholders. Companies must adapt best practices to address key challenges to employee resilience including organizational commitment, well-being, burnout, and job satisfaction.
Based on Accenture’s Global Disruption Index, disruption levels increased 200% between 2017 and 2022 versus just 4% from 2011 to 2016. Key factors measured by the firm included economic, social, geopolitical, climate, consumer, and technological. Resilient companies excel across these factors, outperforming their peers in several metrics. By embracing business resilience, organizations can safeguard their operations, protect their assets, and maintain stakeholder confidence, even in the face of significant disruptions. It is a critical competitive advantage in today’s dynamic business landscape, enabling organizations to adapt, recover, and thrive in the face of ongoing adversity.
“96% of organizations have experienced disruptions in the past two years“
PwC’s Global Crisis and Resilience Survey 2023
What is a PEO and When is it Used?
A PEO is an outsourced HR service provider that assumes the role of an employer for specific purposes, such as payroll, benefits administration, regulatory compliance, and risk management. By entering into a co-employment relationship with the PEO, businesses can tap into a wealth of HR expertise and resources while maintaining control over their day-to-day operations and strategic direction.
Over the past 15 years, the industry has rapidly expanded, growing at a 7.5% CAGR between 2008 and 2022 according to NAPEO, the industry association. Today the PEO industry covers 4.5 million work site employees (WSE) paying more than $308 billion in wages. Additionally, PEOs account for 17% of all companies with a workforce of between 10-99 employees. This is more than double the 2008 levels. Of the 523 PEOs across the US, the top 30 account for nearly 60% of the industry’s WSEs suggesting some level of industry concentration.
Boosting Business Resilience with Deel US PEO
Strengthening business resilience through workforce management creates opportunities for companies to explore various strategies. As such, Deel emerges as a leading player serving domestic businesses and those with a global footprint. Deel’s reach is global with a presence in more than 150 countries supporting companies with a large contractor workforce, or direct employees. Deel’s US PEO and Payroll Services allows businesses to seamlessly combine payroll, benefits dealing with the ability to handle a range of HR issues from state tax compliance to terminations and worker claims. Key advantages to Deel’s platform include:
Compliance Expertise
Regulatory compliance for small business can be onerous with the costs of regulation to smaller businesses with 50 employees roughly 20% higher than they are for the average firm. For example, Federal labor regulation is expansive creating operational bottlenecks, pitfalls, and fines for less adroit businesses. At the Federal level, major labor regulations includes:
- Title VII of the Civil Rights Act
- Americans with Disabilities Act (ADA)
- Equal Pay Act
- Fair Labor Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Immigration Reform and Control Act
- National Labor Relations Act (NLRA)
- Occupational Safety and Health Act (OSHA)
- Pregnancy Discrimination Act
- Executive Order 11246
These laws and regulations are constantly revised and updated with some tightened and others relaxed. In addition to extensive regulation at the federal level, each state has its own level of regulation that can vary considerably. For example, the tight US job market has caused states such as Minnesota, Iowa, Tennessee, Arkansas, and Ohio to relax child labor laws to increase workforce participation in various sectors e.g., construction to address worker shortages.
Access to Competitive Employee Benefits
Deel US PEO and Payroll provides access to employee benefits programs from the market-leading carriers that are normally out of reach for small businesses. Healthcare, 401K and supplemental insurance e.g., critical illness are provided at competitive rates.
Customer Service
Deel’s support team is available 24/7 with dedicated CSM’s to help answer any questions you may have. Plus, your employees have access to a chat to handle any inquiries.
Scalable
Across the United States, multiple opportunities exist for companies to scale their business domestically taking advantage of business growth across megaregions. Deel US PEO provides scalable and flexible HR solutions that can adapt to a business’s changing needs, supporting growth and ensuring consistent HR support throughout various stages of the organization’s lifecycle.
Expertise and Resources
Deel brings a team of more than 350+ in-house experts to address the regulatory and financial complexities associated with providing best-in-class nationwide PEO strategies.
Understanding How Deel’s PEO Solution Works
Deel’s US PEO and Payroll can significantly benefit your organization as it seeks to navigate current labor market tightness and future uncertainty. Below is a list of FAQs for companies interested in partnering with Deel.
Deel FAQs
Is Deel PEO and Effective Solution?
For businesses seeking the best PEO provider, several key factors must be considered these include:
- Pricing transparency: Deel’s HR software breaks down costs by line item rather than presenting confusing bundled prices. Additionally, Deel won’t charge for comprehensive HR management features such as IT management, App management, Expense management, and Reporting. Deel’s pricing model is clear.
- Quality of HR Support: Deel, delivers comprehensive HR support from their 350+ in-house HR and payroll experts. These are experts versed in tax, labor, and other compliance matters across 50 states. Additionally, these dedicated HR generalists ensure a higher level of service compared to those relying on a 1-800 hotline model.
- Flexibility with Brokers: Some PEO companies limit this option. Deel does not. Deel lets you choose your preferred broker. Specifically, companies can bring their own benefits plans or access healthcare plans from the leading benefit carriers at affordable rates.
How Are Deel PEO Services Structured?
Deel’s US PEO model is similar to others in the industry. For example, when a company engages with a PEO, they enter into a co-employment arrangement. As co-employers, the PEO and client contractually share employer responsibilities and liabilities. However, the client company retains ownership and control over its operations, including day-to-day management of employees and product development, marketing, sales, and service. The PEO usually assumes responsibility for HR-related projects such as administrative tasks, employee records, employee benefits, payroll processing, and employment taxes.
Both the client company and the PEO have compliance obligations. However, PEOs typically assume much of the liability for the business of employment, such as risk management, human resource management, payroll taxes, and employee tax compliance
How Much Does Deel PEO Cost?
PEOs typically charge an administrative fee for their services, often using one of two pricing structures:
- A fixed monthly fee per employee, usually around $1,000 per employee annually or,
- A percentage of overall payroll, usually 2-11%.
Additionally, some platforms might also charge you for accessing their HR functions, reporting, or enabling certain integrations.
Innovative Workforce Models for Business Resilience
Finally, in an era of constant disruption and economic uncertainty, enhancing business resilience has become a strategic imperative. The macro challenges are structural. Even within an evolving global landscape opportunities abound. However, having an effective workforce strategy is essential to staying competitive. Partnering with a Professional Employer Organization (PEO) like Deel can provide your organizations with a robust framework to navigate challenges, mitigate risks, and position it for long-term success.
Deel’s cutting-edge PEO and Payroll solution offers market leading global expertise, streamlined technology, and superior customer support. These qualities empower businesses to focus on their core operations while ensuring compliance, cost-efficiency, and access to competitive employee benefits. Whether managing a domestic or international workforce, Deel’s comprehensive suite of services provides a scalable and adaptable solution tailored to the unique needs of each organization across multiple industries.
As businesses brace for potential economic and geopolitical headwinds, a strategic partnership, Deel provides a competitive edge. By leveraging Deel’s resources and expertise, organizations can enhance their business resilience, foster a culture of adaptability, and emerge stronger from adverse conditions, positioning themselves for sustained growth and success in a rapidly changing global economy.
To learn more about how Deel’s US PEO and Payroll solution works in enhancing business resilience for your organization follow the link here. To learn more about our partnerships for growth visit our website to learn more. Be sure to follow us on LinkedIn.
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