What is a PEO?
In today’s competitive marketplace, deciding to outsource a portion or all of your human resource administration could go a long way toward increasing your bottom line. By entering into a co-employment relationship with a professional employer organization (PEO), you will have the time and freedom to focus on what really matters—growing your business.
A PEO-Client relationship involves contractual allocation and sharing of employer rights, responsibilities and risks. This means the PEO will contractually hire everyone in the client firm from CEO to janitor, put them on their payroll, pay taxes through their tax ID number and secure benefits and workers compensation for each employee. Business owners who outsource HR tasks via a co-employment relationship benefit in the following ways.
Access to better health and retirement benefits
A PEO is able to offer large company benefits to small companies. Such a scenario often means business owners can offer a wider range of benefits to workers, which helps to attract and retain qualified employees.
Freedom to focus on core business issues
Time is money. A business owner’s time is valuable and better spent attending to tasks related to growth and profitability, instead of employee-related issues.
Professional benefits administration
Employee benefits are complicated, and staying in compliance with federal laws and regulations adds to the challenge. Professionals who work with benefits on a daily basis are familiar with best practices, can lower your costs, and help you remain in compliance.
Workers’ compensation management
Many small business owners fear workers’ compensation claims and lack the knowledge to navigate the process. Lack of experience and a wrong reaction can lead to a damaging lawsuit. A co-employer can handle worker’s compensation claims professionally, reducing your company’s risk and expense.
Reduced payroll and accounting costs
Companies that enter into a co-employment relationship benefit from a decrease in the cost of employer payroll processing and related accounting costs.
Reduced employee turnover
Employees who are happy with their work environment, pay, and benefits are likely to remain with their employer long-term.
Monitored compliance of federal and state regulations
State and federal regulations change and are re-interpreted regularly. A co-employer helps monitor compliance and reduces your liability.
Risk management for employers
There will always be inherent risks in entrepreneurship. A co-employment scenario best mitigates human capital risks by providing a way for employee-related issues to be handled appropriately.
Professional employee handbooks and internal employee communications
A company’s employee handbook is a resource outlining expected and unacceptable behaviors for its staff. A poorly compiled and/or incomplete handbook is not only unprofessional, it can create legal liabilities as well.
Access to employee and management training programs
Well-trained workers are a boost to your business. Training programs help business owners maximize their human capital. Many PEO’s offer such training programs that may not be otherwise available to client companies.
Finding job candidates who fit both the position and company culture is extremely important. FocusHR’s professional recruiters are experienced in identifying and selecting the ideal hire the first time.
Ability to compete with larger firms for employees and business
With co-employment, business owners have access to benefits typically only offered by large companies.
Assistance with employment-related liabilities
A co-employer has a vested interest in keeping your business compliant and assisting with the defense of employment related claims that may arise.
Access to seasoned HR professionals
Expecting one person to understand all of the laws and intricacies associated with HR is unrealistic. A good PEO is made up of knowledgeable professionals who deal with HR-related issues on a daily basis.