Are you wondering if a PEO company is right for you and your business?
If you’ve been looking for employment solutions, you’ve probably heard the term PEO thrown around. But what is a PEO company, and how do you know if working with one would be good for your company?
Below, we’ll define what a PEO is. Then, we’ll address some of the advantages of a PEO company. Keep reading to learn whether this employment situation will work well for you!
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What Is a PEO Company?
So, what is a PEO company?
PEO stands for professional employer organization. They enter agreements with different businesses in which the companies lease employees to the PEO. In return, PEOs perform many employer-related services.
Their services include many HR-related tasks. Common PEO responsibilities include recruiting and hiring, administering benefits, and overseeing payroll. The PEO may also oversee unemployment-related duties, handle workers’ compensation, and oversee family and medical leave.
PEOs work best for small companies that don’t have the bandwidth to perform these duties in-house.
When reporting wages, the client will use the PEO’s federal employer identification number (EIN). This means the PEO will take on liability for the workers.
How does PEO Company work?
PEO, or Professional Employer Organizations, work by outsourcing a business’s HR and administrative tasks to a third-party provider. The PEO becomes the co-employer of the business’s employees, taking on payroll processing, tax filing, employee benefits, and workers’ compensation.
It allows the business to focus on its core operations while the PEO handles the day-to-day HR tasks. Additionally, PEOs often offer added benefits and resources to the businesses and their employees, such as access to group insurance plans and training programs. By partnering with a PEO, companies can streamline their HR processes and improve their overall HR function.
Less Stress on Your Staff
One of the key benefits of hiring a PEO is the load of work it takes off your staff.
4 out of 10 employees in the United States believe their workplace is short-staffed. Often, this results from companies needing to save money on salaries. Still, consolidating many different responsibilities onto a few employees can leave your workers feeling overwhelmed and frustrated.
If they continue feeling that way, they look for work elsewhere.
Hiring a PEO company will allow you to outsource some of the responsibilities. If your department heads don’t have time to manage employee affairs, working with a PEO company is a good idea.
You Save Money
Working with a PEO saves you money, too.
Most businesses consider their HR department essential. It gives employees a place to go with their concerns and helps the organization run better.
But, when you’re strapped for cash, you might find it hard to hire a full HR team. PEO companies already have HR professionals on hand. Your employees can take advantage of their services.
They Handle Your Benefits
Have you struggled to find good group benefits for your employees?
Locating good insurance plans at affordable prices can get tricky. Yet, without benefits, you might not retain your employees for long. If your employees have insurance needs not covered by your company, they may look for employment elsewhere.
PEOs negotiate with insurance companies to get you the best rates on your benefits. So, when you work with a PEO, your employee benefits might improve. This could help you attract and keep workers for much longer than you used to!
They Know How to Talent Search
Have you ever wondered how to find the best talent for each open position?
Judging applicants via their resumes can get tough, but PEOs know how to find the right candidates for your jobs. Often, these companies have years of experience posting job listings and conducting interviews to help you find the right talent.
Don’t know if another company could really capture what you’re looking for? Don’t worry. They’ll listen to what kinds of personalities and qualifications you need.
You’ll Maintain Compliance
Laws change all the time. Unless you’re keeping up on daily legal news, you might not notice changes to laws relevant to your employees.
PEOs make sure you remain compliant with all labor and employment laws. They’ll let you know if you need to change anything about your operations. This helps you avoid legal consequences down the road.
With a PEO, you’ll also remain payroll compliant. This means every employee will get classified in a correct manner. At the appropriate times, tax forms will get filed and sent to the right authorities.
Do you have employees in other states? A PEO company can help you remain compliant with the laws in that state as well.
Protect Yourself from Lawsuits
Many companies encounter employee lawsuits at some point.
These legal battles come in a variety of forms. Sometimes, employees believe they’ve been discriminated against. Others may think they’re owed more than what your workers’ compensation covers. Some may become injured on the job and claim the work atmosphere is hazardous.
Such lawsuits pose financial and reputational difficulties for companies. When you have a PEO working with you, though, they assume liability. This shields you from the negative effects of lawsuits.
How to Find the Best PEO Company
How do you find the best PEO company for you?
A good PEO will provide the services you need for an affordable price. So, do some research into the rates of different PEO companies and compare them with your budget. Then, contact these PEO services and see what working with them would entail.
Want a fantastic PEO company? Bradford Jacobs provides great services. Check it out today!
Want More Articles Like This?
Now that we’ve answered, “What is a PEO company?” you’re ready to benefit from all the reasons to use a PEO company.
When you work with a PEO company, you have the opportunity to focus on the work that matters to you. So, if you’re struggling with handling the administrative parts of running a business, you should consider working with a PEO.
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