April 6, 2021 | By Brandon Hartsaw
Controlling your company costs and keeping your spending in check is paramount to achieving your lofty growth goals. However, certain areas of business, like HR, cannot be cut or you risk compliance fines.
That's why many companies turn to Professional Employer Organizations (PEOs). A PEO provides you with access to HR experts who can help you control your costs while also providing your employees with an attractive place to work. Because of the many benefits, PEOs have been growing in popularity across industries.
So, why use a PEO? You will find seven compelling reasons below.
Year after year, employees consistently say that, besides salary, the most important item a company can offer them is a best-in-class benefits package. This includes access to high-quality health insurance and retirement options, like a 401(k).
Unfortunately, many small and mid-sized businesses have difficulty providing these benefits. Because these companies are small, their risk pool is small which makes them vulnerable to higher rate increases.
With a PEO, however, your company can join the PEO's existing master benefits plan. Through this program, you can give your employees exactly what they want at costs that your company can afford.
HR administrative burdens can bog down even the most seasoned HR professionals. Keeping up with ever-changing labor laws and coming up with plans to implement changes to your business processes requires not only time and skill but also legal knowledge.
With a PEO, their HR experts complement your internal team by providing guidance on how to make adjustments. Your PEO will also take on other administrative duties such as payroll and tax remittance. These are cumbersome HR tasks that are ripe for mistakes. Handing these off to your PEO can give you peace of mind that the burden is off of your shoulders and is being handled by experts. This also allows your internal HR team to shift their focus to your core business needs.
Inherent in every business is different levels of risk. But you can proactively mitigate these risks and reduce the likelihood of an employee lawsuit or government fine.
Through your PEO, you will receive a handbook consultation where HR experts review your existing policies to ensure they are compliant with rules and regulations. They will also review or help you create a world-class safety program. Having a safety program in place can help reduce the number of on-the-job accidents and help those who may have suffered from a workplace injury with a return to work program that will help them with a speedy and smooth transition.
Staying on top of federal, state, and local labor laws is a full-time job in and of itself. Trusting one person in your company to manage this while also juggling other HR work is a recipe for mistakes. Even innocent errors can result in costly and embarrassing fines and penalties from government agencies.
When you partner with a trusted PEO, their HR experts will alert you when it's time to make any changes. They monitor employment laws and legislation, preparing for any changes that might come.
As a small or mid-sized company, you may have multiple systems that you and your team use every day. It's a patchwork that meets your needs.
But a PEO can provide you with access to their software, hosting all of your HR information in one place. With security levels, you know the information is secure, and employees only have access to the information you want them to see, like their paystubs and benefits. You and your HR team can access more detailed business information like full company payroll and taxes. Having this information all in one location will help increase your efficiency.
Attracting and retaining top talent in your industry requires a high-quality benefits package. By offering that through your PEO, you get one step closer to having an all-star team.
Your PEO gives you the time to focus on your core business needs by taking on administrative duties. Your internal HR team then has the time to focus on building and maintaining an attractive company culture that provides incentives to employees who remain loyal to your organization.
Many small businesses face high workers' compensation costs because their experience modifier rate (EMR) is high. Getting workers' comp insurance coverage with a high EMR can be cost-prohibitive, even though you may be required to carry this coverage.
When you partner with a PEO, you can join their existing workers' comp plan. This gives you access to their EMR, which could result in lower costs for you.
Partnering with a PEO provides you with access to experts to assist you with any claims that may come up. Additionally, your PEO will also help you create a return to work program so that if and when employees suffer on the job injuries, they have a clear path to get back to work. The HR experts at your chosen PEO will also review your workers' comp claims to check for fraud, ensuring that you only pay out legitimate claims.
PEOs are growing in popularity, and the above seven reasons explain why. Outsourcing HR administration tasks, reducing your overall costs, and ensuring compliance with employment laws are crucial to keeping your business running. Partnering with the right PEO can help you achieve these goals.
Acting as the Chief Operations Officer, Brandon actively promotes an environment of creativity, collaboration, and individual ownership to empower Questco team members to deliver exceptional client experiences.