What do Madison Reed, Beyond Meat, Candytopia, and other fast-growing companies all have in common? Well, apart from mind-boggling profits, all these companies use PEOs for their staffing needs. PEOs or professional employment organizations save them the hassle of having to scour the starved job market for fresh talent to work for them.
However, this isn’t to say that PEOs are strictly for large multinationals with tons of resources at their disposal. On the contrary, PEOs work even better for small and medium-sized enterprises. If you’re like most small business owners, you probably have no clue what a PEO is, and that’s where we come in.
In today’s post, we’ll be discussing everything you should know about PEOs and how they can be beneficial to your business/organization.
What Is a PEO?
A PEO or Professional Employment Organization is a company that businesses hire to take over their HR functions. Some of these functions include HR compliance, payroll management, workers’ compensation insurance, among others. These PEOs can help take a huge load off employers by handling HR tasks so that employers can focus on other profit-making aspects of the business.
In simpler terms, a PEO provides managed human resource services to businesses, acting as the de-facto employer. This is quite advantageous for businesses without the necessary financial muscle and infrastructure to have a comprehensive human resource department. Here are a few benefits of hiring a PEO.
PEOs are incredibly beneficial, especially for small and medium-sized businesses. Here are a couple of advantages of hiring one:
Helps Save You Money
PEOs help companies save money by utilizing their infrastructure to cut down administrative and HR costs. They can also help negotiate better premiums and benefits with insurance companies ensuring you get bang for the buck.
You may be wondering, “but don’t you have to pay PEOs for all the services they offer?” While that much is true, the money you’ll save from hiring a PEO overshadows the cost of service. In fact, the return on investment (ROI) for hiring a PEO is about 27.2%.
Saves You Time
The phrase “time is money” couldn’t be any truer than in the realms of business. Sifting through countless papers can take up a lot of your HR department’s time. Time that they could be used for activities that help grow the company and increase its profitability.
Your employees are your greatest assets, and inundating them with a barrage of paperwork can be very demotivating. A better alternative would be to leave the heavy paperwork to the PEO and let your employees focus on the more exciting stuff. You know, stuff that makes them feel like they’re actually making an impact in the company.
PEOs also help streamline your payroll process so employees can receive their salary and benefits on time. The same goes for reporting taxes and wages so that you never miss deadlines or tax payments. PEOs will save you both time and money.
Guarantee Payroll Compliance
Ever-changing state and federal laws have been known to lay many businesses to waste. Keeping up with these capricious laws is more than a difficult challenge for most business owners. Fortunately, by hiring a PEO, you can be guaranteed complete payroll compliance.
This can save you many run-ins with the law that ends with you paying a hefty fine. PEOs are your best bet to sidestep payroll non-compliance penalties. Only 36% of businesses understand FICA, an alarmingly low percentage for something so crucial in payroll compliance.
Hiring a PEO is the simplest way to keep your payroll compliance in check and streamline your entire payroll process. Do your employees and your business a favor by hiring a PEO.
Offers Better Employee Benefits
Employees are a business’s greatest asset and deserve to be treated as such. Unfortunately, not many employers have the financial capability nor networks to offer their employees competitive salaries and benefits. PEOs can use their vast networks and co-employment models to harness better benefits, even for employees of small businesses.
Some of these benefits may include:
- Life and disability benefits
- Healthcare plans
- Retirement benefits
- Commuter benefits
These are just a few of the plethora of benefits that most PEOs offer. Such benefits will make your company attractive to some of the best talents in your niche.
Offers Legal Help
A single lawsuit can run your business to the ground, especially if you’re up against a worthy opponent. Companies can tap into their PEOs’ legal connections and evade lawsuits that would otherwise devastate their businesses. PEOs have experts who are especially versed in discrimination laws which seem to be the undoing of most SMEs in the country.
You can also do with the legal advice you’ll get from the PEO companies in matters of employment law and compliance. Legal issues will be a thing of the past if you hire the right PEO.
Peace of Mind
Running a business, even a small one, can be hectic. The situation is worse when trying to get your business off the ground with little to no help. As a business owner, you wear many hats, but a human resource manager doesn’t have to be one of them.
Working with a PEO can give you some much-needed peace of mind. That’s because you won’t have to handle all the frantic human resource and administrative tasks. Instead, you can focus on growing and expanding your business to increase profitability.
Partner With a PEO Today
Partnering with a reputable PEO could be one of the best business decisions you’ve ever made. That way, you can take advantage of their wide range of services and take your business to greater heights. However, remember to do your digging so that you can find a top-tier PEO that will add actual value to your company.
One such PEO is only a phone call away. Contact us today for professional and expedient PEO services.