When it comes to keeping a company afloat, every penny, and especially every dollar, matters. Human resource needs tend to increase as a company expands.
Imagine if you had access to human resources professionals who could advise you on how to streamline and save costs in the most difficult areas of your organization. How about a team of experts to advise your business on personnel matters? And how would it help your business’s recruitment and retention efforts if you give your workers access to the same advantages that large corporations do?
All of these characteristics have the potential to revolutionize your company, but are they actually possible? They are when you outsource your toughest HR obligations to a professional employer organization (PEO) (PEO).
Simply put, what is a peo services?
A PEO, or professional employer organization, is a corporation that forms a co-employment relationship with your business and takes over many of your HR-related duties, such as payroll and benefits administration. This frees up time you may dedicate to operating your company.
To what extent does using a PEO save money?
PEOs do more than simply save time and stress by managing various employer tasks. They may help you save money by guiding you away from HR-related compliance concerns that might result in large penalties and preventing you from making costly mistakes, such as hiring the incorrect applicant for a crucial post.
Here are seven main areas where a PEO may help you save money by handling your human resources problems:
The primary goal of forming a PEO relationship is to provide your employees with easy access to competitive and all-encompassing benefits without the burden of costly and time-consuming administration and regulation.
When a PEO acts as a co-employer, it may provide its employees a variety of perks including health, dental, and vision insurance, as well as a healthcare FSA, life insurance, and disability protection.
The PEO acts as the plan sponsor and handles all administrative tasks, including contracting with carriers, enrolling employees, providing required notices, and handling COBRA.
The PEO will provide online benefit plan material and enrollment tools, as well as a contact centre that can handle benefit plan inquiries, to help your employees better understand and appreciate their benefits.
- Wages and salaries
Hiring a PEO might cut down on the money you spend on payroll and associated bookkeeping services. In addition to handling your withholdings, W-2s, and garnishments, PEOs may automate the payroll process for your convenience.
Look for a PEO that offers payroll services at a single, basic price, rather than a PEO or payroll service that charges different fees for each of its numerous payroll services.
- Financial preparation for old age
A professional employer organization (PEO) may facilitate a retirement savings program, such as 401(k) plans, which may be an attractive perk for potential and current workers alike.
Find out whether your PEO offers a 401(k) plan so your workers may save for retirement with pretax dollars and take advantage of any company matching or other contributions.
The PEO will act as a plan sponsor, handling all administrative tasks and regulatory needs such as compliance testing, distribution processing, and notifications. Your workers should expect improved retirement results since the PEO will give instructional materials and an online experience.
- HR regulations
Labor law is complex and constantly evolving. Your company might face serious consequences if you fail to stay abreast of the ever-evolving body of human resources laws, regulations, and guidelines. If you don’t comply, you might be fined by any number of state and federal entities.
Have you been keeping up with the following statutes and ordinances? If not, a PEO’s experienced HR staff may advise you on how to avoid common compliance pitfalls.
Do you have a list of the places where your company operates and their respective paid sick time policies? It is your responsibility to follow all applicable sick leave regulations in any jurisdiction in which you do business, even if the laws are just slightly different from place to place.
Therefore, it is the company’s responsibility to ensure compliance, even if just one remote worker resides in a certain state or city. When you have staff in several states, this may make complying with the law a real pain.
Do you know the rules that now exist about how to hire people? A slew of new “ban the box” legislation has made it illegal for prospective employers to inquire about applicants’ criminal records.
- The Workers’ Compensation Act
Workers’ comp is an expensive and time-consuming expense because of insurance premiums and claims management. If you hire a PEO as a co-employer, they will supply workers’ compensation insurance via their own program and manage all of the accompanying compliance, audits, paperwork, and certificates.
In addition to the core HR services team, a strong PEO should provide your company with access to workers’ compensation professionals who are acquainted with your company and can work jointly with them.
Consider you’ve got a plan to lessen the impact of litigation on your budget and reputation. Just one lawsuit may bankrupt your company, therefore it’s crucial to limit your legal responsibility as an employer. Employment-related disputes, such as wrongful termination, are an area in which a PEO might share culpability.
The HR expertise they possess will be useful in ensuring that the release agreements are in accordance with local regulations. One must remember, however, that this kind of guidance is not meant to replace legal assistance. Instead, it acts as a secondary line of protection, an extra pair of eyes that may alert you to impending danger.
Rapid hiring is the norm now. Every time a new job opens up, it requires an immediate response to identifying a suitable and skilled individual to fill the position. The issue is that you probably lack the resources to dedicate to the fundamentals of effective recruitment.
When you include the expense of advertising the position, holding interviews, checking references, and more, it’s easy to see how employing the incorrect individual may be a huge mistake. Comprehensive PEOs will go above and above by providing access to professional recruiters who can assess your company’s staffing requirements and provide solutions.
By teaming up with the best PEO companies, your firm may avoid taking on many of the administrative tasks and legal liabilities often associated with managing staff. As an added bonus, partnering with a PEO will allow your company to provide a more robust benefits package to workers, as well as provide them with convenient online access to benefit information and enrollment tools.