There are many reasons why a company would join a Professional Employer Organization (PEO); here we have assembled a list of the Top 5 reasons to join a PEO. We compiled this list from our years of working with the best companies and seeing why they made the choice to join a PEO.
So here we go:
- One vendor - PEOs streamline the entire process of payroll, state and federal tax collection and remittance, employee benefits, workers’ compensation and HR administrative tasks. The PEO provides a Human Resource Management System (HRMS) which gives you a single source to manage every aspect of having employees.
- Employee Benefits - PEOs offer access to Fortune 500 employee benefits that are not available in the insurance open market. PEOs handle the onboarding of your employees, administration of the plans and COBRA to ensure you are compliant. Small businesses can compete with larger companies by offering rich employee benefits. All of the major insurance carriers work with PEOs so there a lot of choices.
- HR Administration - PEOs help small businesses institute an immediate HR infrastructure that ensures they are compliant with state and federal laws. It enables you to focus on growing your business, rather than staying up to date on the ever-changing landscape of laws and regulations. A great deal of HR is spent on administrative tasks, rather than growing the company and a PEO alleviates that burden.
- Workers’ Compensation - Joining a PEO allows you to take part in their Workers’ Compensation master policy. Every company is required to have Workers’ Compensation insurance and most options require you to deposit 25% to bind coverage and requires an annual audit. The annual audit will require you to pay more money if you’ve hired more employees throughout the year. A PEO eliminates the annual audit, and there is no requirement to give a 25% deposit.
- Fixed costs - Being part of a PEO gives you a clear cut idea of what your costs are going to be year in and year out. The PEOs work tirelessly to keep their insurance renewals down, so their clients won’t leave. Every year they work with the insurance carriers to introduce new plans and ways to reduce the costs of insurance to their clients. This gives you the ability to forecast and know precisely what your costs will be.
If you have joined a PEO, then I’m sure you have your reasons if not one or all of the above listed. PEOs are a great tool for small-medium businesses to retain and attract the best talent for your organization. We help companies every day find the right PEO, if you would like us to help you, then let’s talk.