Right now, we don’t know exactly what kind of business you’re in. It might be architectural design, celebrity news, or manufacturing the widgets that pop up in so many Microeconomics problems. But what we do know is that no matter what you do, you have to focus on developing and improving the products or services that you offer, increasing efficiency so you can profit and grow, and cultivating the talent that helps you get it all done.
Chief Financial Officers have a critical role in that process. They make sure the numbers can let it happen. They manage risk and provide the forecasts on which every other aspect of the business depends. When it comes to taxes and compliance, they make sure the firm stays in the good graces of the government. In short, the CFO accurately plots the company’s past so the company can operate properly in the present as they pave the way for an optimal future.
That’s a lot of responsibility -- and making sure that’s all they have to do is where a professional employer organization (PEO) comes in.
PEOs Let CFOs Be CFOs
CFOs have a lot on their plates, but it seems as though they’re always being asked to do a little bit more. Especially in smaller firms, CFOs or their equivalents are often called on to handle human resources. Hiring, firing, compensation, benefits… it adds up fast, all at the expense of the CFO’s actual responsibilities.
PEOs handle the stuff that keeps a CFO from doing his or her job optimally. From payroll to taxes to benefits, HR outsourcing solutions shift those responsibilities from the CFO so he or she can focus on operational efficiency, risk management, and growth strategies. A survey from The Aberdeen Group showed those handling HR issues said that their most significant barrier to strategic productivity was being weighed down by day-to-day tactical activities. If you’re a CFO, are you contributing to the business best by spending your time on HR? And if you’re a CEO, don’t you want your CFO to be able to focus on the financial present and future of the company?
PEOs Save CFOs Money… and Stress
Partnering with a great PEO organization hits CFOs where it counts the most -- the bottom line. Most businesses aren’t so large that they can have dedicated divisions for payroll, accounting, training, legal, and benefits management -- yet all businesses need those functions done and done well. The alternative to a PEO is creating a patchwork quilt of those services yourself, generally using a small team that probably should be focusing on other things. If you hire specifically for these roles, the costs can be tremendous. If you ignore them altogether, you’ll be out of business.
A PEO lets you outsource those processes at a reduced cost -- and with less time and stress -- than putting them together yourself. The right PEO provides the services and expertise of a world-class company at a lesser cost than doing it in-house. More value for the company and employees, all at a lower price? Implementing that sort of plan makes a CFO shine.
But utilizing the services of a PEO can also eliminate the often-frictional relationship between the CFO and HR. In most companies, people make up the majority of expenses, and CFOs give their attention accordingly. A CFO who knows what the business must offer its employees still needs HR to implement it in a cost-effective way, and cooperation can be tough.
CEOs depend on that relationship working out -- and PEOs know that. They’re positioned to work with CFOs to provide the necessary benefits and HR functions in a way that fits the company’s needs and resources. No conflicts with the CFO, no pushing and pulling. Just results.
Numbers Really Are People
CFOs are responsible for bean-counting and forecasting, but a CFO’s job is, in the end, really about people -- the costs of compensation/benefits, operational analysis, forecasting, and risk management determine who’s working on what and how productive they are. Attracting and retaining the best talent drive progress upward (or… not). CFOs know that the best talent can be expensive, but replacing the best talent is really expensive.
PEOs allow small- and mid-sized businesses to offer the benefits that top talent craves, including group health rates and 401k plans. Stronger, less expensive benefits packages help companies make better hires and reduce employee turnover -- and the CFO gets to brag about the savings. Even workers’ compensation insurance is more cost-effective.
CFOs manage the resources that companies need to retain their people and improve productivity, but they have to make sure it’s done in a sustainable way. The money and time saved by working with a PEO allows CFOs to pay attention to the product and process concerns that keep a company competitive and position it for greater success.
Don’t Spin Plates, Outsource to Plate-Spinners
We still don’t know exactly what your company does, but we know it’s probably not human resources. CFOs have two options: they can recommend that the company spin all the different plates of HR and its related departments in addition to generating your products and services, or they can work with a professional employer organization whose expertise is in plate-spinning.
Doing it all yourself can work. Generations of bootstrappers have chosen to bear the burdens of HR. But that too often comes at the expense -- both real and in terms of opportunity cost -- of sustaining and growing your business optimally. CFOs who have guided a company to stability can accelerate their success by partnering with a PEO that allows the business to focus on what it does best.