About 40 percent of small- to mid-sized businesses use a PEO. A PEO, or professional employer organization, serves businesses with an average of about 20 employees, but PEOs are set up to handle businesses in a wide range of sizes. PEOs operate in all 50 states, and specialize in human resources services so that the business doesn’t have to hire or become HR experts in order to keep costs down while offering competitive benefits. PEOs also help keep the businesses they serve out of legal trouble. Could a PEO benefit your growing business? Here are the things you need to consider.
1. A PEO Lowers Your Costs
Hiring a full-time HR staff is out of reach for many small businesses, and offering top benefits like insurance plans and retirement packages are costly when purchasing for small groups of employees. A PEO makes these endeavors less expensive, while allowing you to offer attractive benefits. PEOs can also save businesses money in terms of the fees and overpayments that can be associated with regulatory compliance.
For example, by staying on top of employee numbers, you can cut costs for workers’ compensation insurance. Companies that invest in a PEO pay fewer fines to agencies like the IRS, as well, because payments to those agencies are made on a timely basis even when your in-house workers are too busy with work related to running the business.
2. A PEO Keeps You Out of Legal Trouble
This is a nation of regulations. The state and federal governments regulate everything from the types of people you hire to what health insurance plan you offer workers. There are also regulations regarding how to deduct payroll taxes, when and how you can fire employees, and how you manage personally identifiable data on employees (such as where you keep their social security numbers and other personal info).
A PEO can help a business stay within these regulations and out of trouble with regulatory agencies and discrimination lawsuits. A PEO will also produce the audits and reports you need to submit to regulatory agencies, helping your business stay in compliance. In addition, PEOs can assist you with issues like developing and distributing employee handbooks, which can be very helpful in terms of staying within the law and avoiding trouble.
3. A PEO Allows You to Attract Better Employees
There are lots of job applicants out there, but the number of high-quality workers available is tight, and hiring within industries is highly competitive. By offering the best benefits packages, you can lure the best candidates to your business, improving your chances of success. What types of benefits are the best workers looking for?
• Workers want affordable health insurance for themselves and their families. Additionally, many small businesses are now subject to the employer mandate portion of the Affordable Health Care Act.
• Workers need solid retirement plans that they know they can depend on to be there after a lifetime of working for a company.
• Workers want life insurance to protect their loved ones if something happens to them.
• Workers want disability insurance in case they are injured or become ill and are not able to work.
• Workers want flexible benefits that can be tailored to their individual needs, lifestyles, and circumstances.
A PEO can identify and acquire the best benefits packages available and give you affordable options for offering your workers excellent benefits that are as good as or better than they could get from one of your competitors.
Additionally, a PEO can offer consultation in regards to hiring. These services include helping you draft good job descriptions, learn how to interview candidates properly and legally, conduct solid background checks and drug screening, and post your available jobs where they will be noticed by top job candidates. All of this is time-consuming and frustrating if you have to do it in-house.
4. A PEO Helps You Keep Good Employees
What does it take to keep your well-trained, skilled, and experienced workers with you over the long term? A PEO will help you evaluate what you are offering and stay up to date with industry changes and trends. This keeps you from falling behind the times in terms of salaries and benefits, so that your workers don’t escape to a business that can offer them more.
5. A PEO Improves Your Productivity
Is your business stressed trying to keep up with tax administration, payroll processing, hiring and firing, regulatory compliance, and other issues? A PEO can remove this stress from your staff, freeing them to do what the company does best. When your company gets ready to expand, you can focus on growing and building, while the PEO handles multi-state benefits issues.
The PEO handles issues like employer practices liability insurance, while you focus on adding a new product line or delving into a new market. The PEO also takes responsibility for handling the HR end of any collective bargaining agreements your business is subject to, so you can focus on managing workers and satisfying your client base.
6. A PEO Allows Your Small- to Mid-Sized Business to Compete With the Big Guys
By lowering costs, improving productivity, and reducing liability, a PEO allows your company to stay competitive with the bigger businesses, even though your budget isn’t as generous. You can hire the best workers, offer the nicest benefits, and keep costs low. It doesn’t take a huge staff of HR and legal professionals to keep your business out of trouble with workers’ comp insurance payments or payroll tax — all you need is the right PEO to stay on top of these issues.
7. A Good PEO Isn’t Hard to Find
SourceOne Partners is in the business of matching your company with the right PEO for the job. We can find a PEO that operates in the state or states where you need services, and one that can offer you the right HR services at the right price. Visit SourceOne Partners or call 561-674-0748 to get started now.