As a business owner, you probably have too much on your plate, from crunching the numbers, being the face of the company to managing your employees. Even small business owners can find the whole business-running affair a tad overwhelming. However, PEOs would gladly take a huge load off your back, and here’s how they do it.
If you’ve never heard of PEO, then maybe you’re not cut for business- no, we’re kidding. If you’ve never heard of PEO and the benefits of having a PEO, all the more reason to read this article. If you also think that PEO means professional executive officer, then you really need to read this piece.
In this post, we’ll be looking at what a PEO is and how it can be beneficial to both employers and employees.
What Is a PEO?
PEO abbreviates Professional Employer Organization, and it’s an organization that specializes in leasing employees to a business. However, putting it that way would be oversimplifying it. Apart from leasing the said employees, the PEO also manages and coordinates various employee-related activities.
That way, a business owner can outsource human resource operations to the PEO and watch the money trickle in. The business owner won’t serve the capacity of the employer when they hire a PEO. The PEO will be the defacto employer for the period of service.
However, the contract will spell out the services that you can outsource to the PEO. With a firm understanding of what a PEO is, we can now move to the benefits of PEOs.
What Are the Benefits of Having a PEO?
Entering into a co-employment relationship with a PEO can be immensely beneficial for your business regardless of its size. Don’t believe us? Here are a few benefits of having a PEO for both you and your business.
1. Human Resource Compliance
Employment law is dynamic and convoluted and a handful for even the most seasoned employers. Failure to comply with these employment laws and regulations could cost you big time, and remember, ignorance is no defense. However, having a PEO is a sure way of sidestepping hefty fines from state and federal agencies.
For instance, did you know the “ban the box” law doesn’t allow employers to inquire about potential employees’ criminal histories before hiring? You also can’t ask about employee salary history when doing the same to comply with the wage equity laws.
What’s more, your current human resource setup can team up with the PEO to be even more effective. So don’t worry about having to show your HR team the door; they can work hand-in-hand with the PEO and give your business a significant boost.
2. Employee Recruitment
Any employer knows that recruitment is one of the most difficult responsibilities. That’s because every vacant position means a gap in your business operations that someone has to fill ASAP. You can rush through the whole thing and hire the wrong person or use a PEO to get the best person for the job.
Apart from saving you some valuable time, PEO recruitment also saves you a ton of money. Remember, you have to spend on vacancy ads, the interview, and background checks if necessary.
If you do the math, you’ll find that using a PEO is way cheaper and has better results. A reputable PEO will have competent recruiters eager to take over your entire recruitment exercise.
3. Taxes and Payroll
Handling taxes and payroll can be overwhelming but especially for larger businesses. That’s most businesses hire accountants to do their bidding. A more prudent move, however, would be to hire to take care of the taxes and payroll.
However, PEOs offer beyond payroll services they go further and deduct the correct taxes from each employees’ paycheck for that pay period.
If you find a reputable PEO, they may create online platforms where employees can get information about their salaries and taxes. This is much more than what you get from a payment processing company. With a PEO, you can say goodbye to all those payroll leads you keep looking for.
PEOs also offer various payroll options to accommodate all employees. This is an added advantage to the employees. If, for instance, some employees don’t have bank accounts, the payroll processing company will use an alternative payment method.
4. Better Benefits for Employees
If you have a PEO, you can give your employees better and more comprehensive benefits. PEOs can leverage benefit options for top carriers for your employees. These benefits that PEO confers are more affordable and flexible to accommodate employee life changes.
The benefits may also include retirement saving options for your retiring employees. The PEO will take care of regulatory reporting and other benefits-related operations. This is a win for both you and your employees.
5. Better Workers’ Compensation
Workers’ compensation is insurance that compensates your employers for any work-related injury or illnesses. While it’s easy to secure workers’ compensation insurance, the problem is you’re likely to pay a bundle for it. Workers’ compensation can be a bit expensive for most businesses, but that’s where PEOs come in.
PEOs will find the most comprehensive workers’ compensation insurance for their employees. They’ll also ensure that you don’t spend too much on workers’ compensation. Your employees will also benefit from the return-to-work-programs for them to seamlessly get back to work.
6. You Don’t Have To Fire Anyone
The best part about hiring a PEO is you don’t have t be the one who breaks the bad news. Giving an employee the boot has to be one of the hardest parts of being an employer. However, as an employer, sometimes you have to do what you have to do.
Give yourself some peace of mind and let a PEO handle the firing. You’re guaranteed to sleep much better if you do.
While there are many benefits of having a PEO, there are also disadvantages of having a PEO. A PEO alternatives may be a better fit for your business and potentially your budget. A PEO Alternative is a company that essentially offers the exact same services that a PEO does, but structured differently. Most PEO companies group their services into a large “bundle” making you financially responsible for services you don’t need. With a PEO Alternative, you’ll have more control over the services you pay for and the services you actually need and utilize. Next Generation Payroll is one of the top PEO Alternatives companies and they offer several different services to handle your most excruciating tasks. You don’t have to risk it all with an inefficient PEO. For a professional, versatile, and expedient PEO Alternative company, contact Next Generation Payroll today. Sign up for our news letters to receive more helpful business tips!