The Hidden Costs of Managing HR the Old Way

Many business owners believe they can’t afford a PEO (Professional Employer Organization). The truth? They’re already spending the money—but in an inefficient way.

Most businesses rely on multiple HR service providers to handle payroll, benefits, workers’ compensation, and compliance, leading to higher costs, administrative headaches, and inefficiencies. Here’s where those hidden HR expenses add up:

• Payroll provider fees – Monthly service fees, plus extra costs for tax filings, compliance support, and HR add-ons.

• Health & benefits broker commissions – Embedded costs in insurance premiums, typically 3-5%.

• Workers’ comp broker fees – Standalone policies with higher rates and minimal claims support.

• 401(k) TPA & administration fees – Per-employee charges, setup costs, and annual audit expenses.

• HR software & compliance tools – Paying for separate systems (time tracking, applicant tracking, onboarding, performance management) with no integration.

When you add up these HR expenses, businesses are often spending thousands per employee per year—and they’re still stuck with manual HR processes, compliance risks, and inefficiencies.

Case Study: How One Business Saved $150K+ Per Year with a PEO

A 75-employee manufacturing company was struggling with time-consuming HR processes and fragmented HR services:

• Their time & attendance system didn’t integrate with payroll, requiring manual, duplicative entry for job costing.

• Their HR manager spent hours reconciling benefit plans and manually adding/removing employees.

• Errors in benefits administration meant they were paying health insurance premiums for employees who had already left.

• They had high workers’ comp premiums with no real claims management support.

• Their 401(k) TPA charged per-employee fees, plus additional compliance filing costs.

After switching to Spirit HR’s full-service PEO solution, their costs and inefficiencies were dramatically reduced:

✅ Payroll & Time Tracking Fully Integrated – Eliminating manual data entry and cutting payroll processing time by 60%. ✅ Workers’ Compensation Savings – Lowering premiums by 20% through group purchasing power and claims support. ✅ 401(k) Cost Reduction – Consolidating plan administration, eliminating per-employee fees, and ensuring compliance. ✅ Error-Free Benefits Administration – No more overpaying for inactive employees or spending hours on benefit reconciliations. ✅ Total Annual Savings: $150K+

Beyond the hard-dollar HR cost savings, their HR leader was freed up to focus on employee engagement, training, and workforce development instead of being buried in administrative tasks.

The Cost Advantage of Consolidating HR Services

Most businesses are already paying for payroll, benefits, and compliance management—but without the efficiency and cost savings of a PEO. Instead of spreading HR expenses across multiple vendors, Spirit HR consolidates everything into one cost-effective HR solution:

🚀 A single provider for payroll, benefits, workers’ comp, and HR compliance 🚀 Lower HR costs through group purchasing power 🚀 No more manual payroll or job costing inefficiencies 🚀 Built-in HR compliance support, reducing legal and tax risks

How to Reduce HR Costs and Improve Efficiency

If your business is juggling multiple HR service providers, you’re spending more than necessary.

Let’s run a free cost analysis and see how much you could save by switching to a PEO like Spirit HR.

📩 Contact us today!

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