A Professional Employer Organization (PEO) provides payroll, benefits, HR services, and regulatory compliance assistance to small and medium-sized businesses. PEOs essentially act as a co-employer, allowing businesses to outsource many aspects of human resources and people management. PEO companies offer several advantages for growing companies. This article will explore the top 10 reasons you should consider going with a PEO.
Access Better Benefits
One of the biggest perks of using a PEO is getting access to Fortune 500-level benefits. Things like health insurance, dental, vision, disability insurance, life insurance, 401(k) plans, and more can be offered to employees through the PEO. The PEO pools together many clients, giving them collective purchasing power to negotiate great rates from major insurance carriers and benefit providers. This allows small businesses to provide big business benefits.
Reduce HR Burden
Managing HR responsibilities like payroll, compliance, recruiting, onboarding, training, and more can become overwhelming for small teams. PEOs take over the full HR function, acting as the HR department for your business. This allows you to focus on core operations and business growth rather than HR admin. The PEO handles it all, from bringing new hires onboard to managing PTO policies.
Access HR Expertise
By using a PEO, you gain access to seasoned HR professionals who become an extension of your team. They provide expertise in areas like employee relations, compliance, training, compensation, organizational development, and more. Small businesses can tap into these specialized skills rather than having to build large HR departments internally. The PEO brings decades of HR knowledge to the table.
Remain Compliant
HR compliance is filled with rules and regulations from agencies. There are many requirements around compensation, safety, discrimination, leave time, labor practices, workplace policies, and much more. PEOs stay on top of all the latest federal, state, and local compliance issues, ensuring your business follows appropriate regulations. Don’t risk fines and lawsuits – let the PEO handle compliance.
Improve Safety
Workplace safety and health programs are a crucial part of risk management. PEOs can help establish safety initiatives to reduce workplace accidents and injuries. From providing training to monitoring for compliance with regulations, the PEO makes sure your people and facilities follow proper safety protocols. This protects your staff and also lowers workers compensation claims.
Simplify Payroll
Payroll can be a tedious chore, especially as your business grows. Making sure federal, state, and local taxes are properly withheld, garnishments are managed, 401(k) contributions are processed, vacation time is tracked, and more takes considerable effort. PEOs fully handle payroll, ensuring staff get paid accurately and on time. Payroll is off your plate so you can focus on revenue-driving activities.
Streamline Onboarding
Bringing new hires on board and having them complete paperwork, training, and orientation can be tedious and time-consuming. PEOs streamline onboarding through automated processes and checklist. New employee paperwork is handled seamlessly, necessary training is efficiently assigned and tracked, and assimilation into company culture is made smooth. Onboarding moves along rapidly with all boxes checked so new staff get up to speed faster. Between automated task management and dedicated support, the PEO onboarding process gets employees productive in their new roles quicker. This accelerated ramp up means new hires contribute sooner.
Access Recruiting Support
Finding and hiring top talent is crucial yet increasingly challenging in today’s tight labor market. PEOs provide access to dedicated, seasoned recruiters who become an extension of your talent acquisition capabilities. These recruiting experts source promising candidates through both traditional as well as innovative channels, screen resumes and applications thoroughly, conduct insightful interviews, manage the offer process from start to finish, as well as run comprehensive background checks, along with ensure a smooth onboarding. With the PEO recruiters handling the heavy lifting across the entire hiring workflow, you benefit immensely from their specialized experience in attracting as well as securing all-star talent.
Pursue Tax Credits
Many valuable small business tax credits and incentives exist at the federal, state, and local levels that can provide substantial savings and benefits for your bottom line. Examples include the Work Opportunity Tax Credit for hiring veterans, ex-felons, certain food stamp recipients, long term unemployment recipients, and vocational rehabilitation referrals. There are also credits available for providing childcare benefits, improving disability access, hiring in certain economically disadvantaged areas, and much more.
But navigating the array of tax credits and ensuring you receive all you qualify for can be challenging and time consuming. PEOs have specialized expertise in small business tax incentives and stay on top of all the latest programs and regulatory changes. They’ll help identify which credits make sense for your company and then handle all the compliance requirements and paperwork to actually secure the credits. This tax savings expertise can amount to tens of thousands in annual savings.
Focus on Growth
Perhaps most importantly, using a PEO allows you to focus on growing your business rather than getting bogged down in back-office administrative tasks. Instead of spending your precious time on mundane HR activities like paperwork, compliance issues, payroll processing, and benefits management, you’re relieved of these duties so you can concentrate on the higher value work that really moves the needle for your company.
With the PEO handling all the repeatable and time-consuming people work, you and your leadership team are free to devote your energy to serving customers, driving revenue growth, expanding products and services, moving into new markets, pursuing strategic partnerships and acquisitions, and scaling the overall operation. The PEO lifts the administrative burden from your shoulders so you can set your sights on big picture business growth and executing the strategic initiatives that will take your organization to the next level. It allows you to work on the business rather than in the business.
Conclusion
PEOs offer invaluable services and support for SMBs looking to build their teams while staying compliant and competitive. By leveraging PEO service organization expertise and resources in areas like benefits, payroll, compliance, recruiting, safety, training, and more, companies can focus on core business goals rather than HR administration. For managing people and freeing up leaders, PEOs are an essential partner for success and growth.
