Is Talent Management With Professional Employer Organization (PEO) An Important Business Strategy?

Is Talent Management With Professional Employer Organization (PEO) An Important Business Strategy?

Hiring PEO’s to streamline the Talent Management process is gaining popularity in the corporate world as an increasing number of employers in the post Covid era are functioning remotely and on-boarding globally.

For years now, the human resource has found itself on a cost-efficiency drill that uses analytics and big data in various hiring models. The global workforce has survived through a worthy but uninspiring directive to: reduce labor costs, maintain compliance through standard operating procedures, and support technology. Even the human resource that was traditionally formed on the principles of recruitment, learning, and development, has now become all about processes, productivity, and performance management.


This has highlighted the importance of talent management, whose goal is to promote a talent-first mindset. With Professional Employer Organization (PEO), companies are presented the opportunity to rebuild and sustain their hiring processes with creativity and innovation. With smooth operating procedures, companies will be in a position to attract talent and develop it into the best. PEO use manages and rewards performance and optimization of the workforce to achieve the best results. Covid-19 has especially enhanced the importance of finding good talent and opportunities in the midst of change. PEO Solutions is aware that financial capital is not the problem to meet a company’s goal, but the talent is!


What is a PEO?


PEOs virtually locate, assist and manage global talent, both full-time employees and independent contractors, without setting up as a physical entity. They highlight the importance of talent management in an organization by building global teams of remote employees from various countries across the world. Here, many people might confuse it with Employer of Record (EOR) that are mere proxy employers for another's behalf. PEOs focus on managing talent through payroll, tax, benefits and training.


Furthermore, with PEO services companies can make informed decisions to make their businesses stronger. It handles payroll processing, risk management, employment tax, time management, HR compliance, employee benefits, attendance management, wage payment, state unemployment tax, payroll tax, employee recruitment, reduced employee turnover, etc.


Why do companies need a PEO?


The importance of talent management lies in successful business operations which can be acquired either through physical establishment or by hiring a remote Professional Employment Organization (PEO). Generally, companies struggle a lot when it comes down to business expansion because it has never been easier and is even more difficult with Covid-19. Companies that were scared to navigate unknown terrains now do not want to physically establish themselves in a new country even if local laws allow.


PEO is an affordable boon for companies because they can run talent management procedures using just a dashboard sitting in their home!


How can PEO benefit companies?


PEOs strengthen the importance of talent management in human resources by hiring, managing, developing, and retaining employees to provide them with a position of prominence within the industry. It plays a crucial role in managing the essential asset of any company – it's workforce .


Let us read why companies need PEOs and how the latter supports businesses:


1. Clear gaps in leadership


The talent management process consists of various cyclic steps on:


→ workforce planning


• recruiting


• on-boarding


• performance management


• training and performance support


• succession planning


• compensation and benefits


• critical skills gap analysis


PEOs ensure all the above-mentioned steps to help companies with finalizing future business strategies, finding existing loopholes, and strengthening the performance of employees.


2. Improved employee performance


PEO reforms the importance of talent management for businesses by formulating strategies that can recruit the best talents, retain them and facilitate their training and growth. Moreover, it uses various employee training tools to streamline the recruitment process and promote interactive learning as well as communication.


Moreover, companies can use standardized talent review and on-boarding models to support the hiring process. They also set key performance indicators (KPIs) to track and measure employee performance. A recent method of using quizzes to measure employee performance is trending.


In addition to this, feedback and reviews, reward and recognition, employee motivation, career development pathway, mentoring and culture compatibility, compensation, and termination are integral processes supported by PEOs. They know that the reason behind effective talent management practice lies in human resources having a clear idea of the organization’s goals and objectives.


3. Increase Employee Motivation


Employees feel motivated only when they know their efforts will lead to high performance and a desirable outcome. In light of the same, PEO produces various talent management strategies to strengthen the belief that increased effort will improve performance. These strategies help to develop an understanding of performing extremely well with a clear comprehension of the work and complete trust in the team. Along with trust, it is also crucial to maintain the emotional orientation of the employees that can only be done with a reward for each outcome.


Besides this, PEOs support the Object-Oriented Theory of Talent Management that says a healthy and proper communication channel is essential between the employees for optimum sharing of ideas and knowledge for better problem-solving.


4. Engage top talent


The engagement of top talent is all about right from a well-structured on-boarding program, progressive culture, and attractive remuneration strategy. Moreover, engagement is further dependent on succession planning, internal mobility, retirement, knowledge management, and exit interviews. PEO-supported talent management plays a crucial role in regulating and maintaining each process to better engage existing employees.


Why do companies need a talent management strategy?


It provides a structured approach to hiring and managing staff that can meet organizational needs and provides better results. A good talent management strategy plans the workforce to continue the supply of employees who can streamline various operational processes and are looking to better themselves with each assignment. PEO understands this and manages a pool of quality candidates for companies who wish to grow with the best employees.


Besides this, PEO also generates compliant contracts, manages payroll, and provides benefits to global clients. Today, we see new-age SaaS-based platforms that streamline administrative complexities and help clients with access to great talent with just a a few clicks and 100% payroll accuracy. These platforms can be integrated with people and processes to get seamless results. Moreover, employees can be paid in their local currency.


To sum it up!


Even though PEOs have been around us for quite some time, it is now that global companies are recognizing them. With better awareness of the importance of talent management to an organization’s goals, companies are considering PEOs to manage global talent. The world is getting more competitive with time where companies need all resources to meet international talent management demands that comprise consistent scrutiny of effort and investment already made. With PEOs, they can easily tackle this issue and can devote their undivided attention to business operations.


PEOs work with complete confidentiality and use top-notch security systems to save their clients’ data. Moreover, they conduct all the procedures with utmost accuracy providing their clients with digital updates. To begin with, when hiring one, it is essential to see if it is active in the client’s country through the testimonials. Then, look at whether it is affordable for the business or not. These two points must be the major decision-making factors as they will help with the instant resolution of the client’s issues without burning a hole in the pocket. So, think about hiring one for your company and streamlining your talent management process.


Varun Kumar is an SEO Analyst at Multiplier Technologies Pte Ltd, a fast-growing PEO/EOR platform in Singapore. He loves to write in all his free time.


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