PEOs, or professional employer organizations, have been in existence since the 1980’s; they serve as co-employers with their clients, handling many human resource functions, from filing payroll taxes to writing job descriptions for your hiring efforts. While this may strike you as a service for big businesses, the typical client averages 20 employees. If you are wondering how a PEO may benefit your business, here are just a few to consider.
Focus Energy on Revenue-Generating Activities
Managing employees takes a lot of work, from managing benefits to making sure your company is compliant with the myriad labor laws and regulations. While these are important for sure, these sorts of administrative tasks suck up time and energy that could be better spent on tasks that directly contribute to increased revenue. Outsourcing these functions to a PEO firm allows you and/or your HR department to focus more on these bottom-line activities.
Reduce Employer Liability
In the last 20 years or so, labor laws have more than doubled; it is a complex area to navigate and failure to comply could have serious consequences for your business. The average business owner is usually far from fluent in such laws and regulations. Since PEOs act as co-employers, they can take over this burden, reducing your liability. They have the knowledge that will ensure you are compliant.
Better Benefits at a Lower Cost
PEO firms are co-employers with a large number of businesses, meaning they are managing a large number of employees. This allows them to obtain benefits at a rate that you would never be able to receive on your own. It also allows you to offer a wider variety of benefits, as well as better ones, for a much lower cost. By working with a PEO, you tap into benefits that would only typically be available at much larger companies.
Help in Creating a More Effective Workforce with Less Turnover
There are various peo resources when it comes to hiring and maintaining top employees. First and foremost, the more attractive benefits package you can offer when a PEO serves as your co-employer gives you an edge when recruiting new employees. Firms can offer you a lot when it comes to the hiring process, such as assistance in recruiting, helping write job descriptions and offering guidance as far as what salary to offer for a position. By pooling together employees from all clients, working with a PEO also means you may be able to offer certain protections that you would otherwise not be able to, because you have a smaller number of employees.
PEO firms can help put together employee handbooks, devise orientation programs, offer training, both initial and ongoing, facilitate more effective communication between the company and its workers, and resolve disputes.
Considerations for Choosing a Firm
If you have decided to go for a PEO, here are a few important considerations when choosing your new partner. First and foremost, choose a firm that has experience in your industry and your size company. Evaluate the credential of the staff—what sort of professional certifications do they possess? How flexible is the company in their offerings? Get references from other clients in your line of business.
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