What is a PEO?
What is a PEO (Professional Employer Organization)?
If you’re a small to a mid-sized business owner, you probably feel like you’re constantly being pulled in a dozen different directions all at once. There are always clients to meet with, new opportunities to research or prospect, managing all the finances, and resolving internal disputes; all of which are important if you want your business to be successful. However, it’s pretty hard to accomplish these tasks all on your own. Without the support of your employees, there is no way to tackle all the demands of your business. If you don’t take care of your employees, they might not stick around for long. When balancing the ever-evolving demands of running your business with the needs of your employees has eventually become too much of a challenge, it’s probably time to enlist the services of a Professional Employer Organization (PEO) to help your business.
What are the benefits of a PEO?
A PEO is a single-source provider of integrated business services that enables business owners to responsibly & cost-effectively outsource many of their human resources, administrative, and employment-related tasks. All of the behind-the-scenes busy work keeping business owners at the office well into the evening. By partnering with a PEO, business owners can work more efficiently, stabilize their cash flow and solely focus on scalable growth while the PEO handles all of the back-office burdens.
How does a PEO work?
The PEO delivers value to employers through shared risk and liability in a model referred to as a “co-employer” or “co-employment” relationship. In this contractual arrangement, the PEO is recognized as the administrative employer and the client or business retains its role as the worksite employer. It’s a win-win for employers. They retain control over their day-to-day operations while the PEO offers economies of scale by pooling its employees with those of other companies to leverage coverage and pricing, often resulting in access to more benefits options at better rates. We’re talking workers comp insurance, risk management, payroll, health insurance, HR compliance, 401(k)s, wellness programs – all those big-business benefits that can help attract and retain employees. Therefore, it’s no surprise that according to a recent survey, small businesses that use PEOs grow seven to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business.
What can a PEO do for my company?
Some of the tasks a PEO can handle include employee administration, onboarding and exiting, workplace safety, ensuring compliance with state and federal labor laws, drug screenings, FMLA administration, unemployment and workers compensation claims management and coverage, risk management, benefits, payroll, and payroll tax compliance. And because PEOs have their fingers on the pulse of new developments related to HR, employers can rest assured that their businesses will be protected, kept up to date and their liabilities reduced. Small to mid-sized businesses (1 to 500 employees) are best suited to the PEO model, though that’s not to say that larger companies can’t benefit from this type of arrangement as well. PEOs serve a wide variety of industries including construction, hospitality, manufacturing, health services, staffing and start-ups, but in actuality, they’re a great fit for just about any industry you can think of.
How do I get started?
Whether you’re ready to hire a PEO immediately or you’re still doing your research, our team of experienced professionals at AXIS Group is here to help you every step of the way. Contact us via phone or email by clicking here.
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