Do you run a business? If so, you probably have to perform many tasks that keep you from focusing on the most important aspects of your business. When you have to “wear several hats”, your business can become counterproductive, draining you of energy and resources, besides robbing you of the time required for operating your business. Many business owners are discovering how hiring a PEO has given them more hours in a day and freedom for their running their companies. Here are four important benefits of using a PEO, along with a few considerations and warnings.
What Is a PEO?
Perhaps you’re not sure what’s meant by a PEO. Simply put, a PEO (Professional Employer Organization), which acts as third-party provider, is a company that partners with a business for providing HR services. In other words, employers using PEOs can outsource management tasks, which allow them to concentrate on their core business responsibilities.
HR Management
Instead of having to manage HR (humans resources), you can give this job to a PEO that assumes the role of a human resources department. Their services include those, such as managing payroll, administering benefits, workers’ compensation and other jobs. Additionally, PEOs keep track of employee sick times, vacations and quarterly tax filings.
They also recruit, hire and train employees, in addition to conducting routine drug tests. PEOs stay current in work policies so that a business stays compliant with changing regulations and laws.
Reduced Business Costs and Increased Profits
Reduced business costs and increased profits are two of the main perks of hiring a PEO. Therefore, your business expenses can be lower, while your profits can increase. Consider that when you outsource your administrative jobs to a PEO, your company can save money because of what’s known as economies of scale.
What’s more, productivity can improve, which can lead to increased profits. Furthermore, your employees will become more satisfied because their paychecks can increase, and they’ll receive more attention and support from you.
Reduced Risks
By partnering with a PEO, you can share the responsibility involved in various types of threats to your business. Although using a PEO doesn’t mean you won’t have any risks at all, it does mean you’ll have less risks. For example, a PEO can reduce the likelihood of lawsuits involving employee sexual harassment. Consider how PEOs are highly training in handling delicate matters that can occur in a workplace.
Being Able to Attract and Keep the Best Employees
Because a PEO provides the best employee benefits problems, you’ll have a better chance of luring and retaining exceptional employees. Think about how businesses partnering with PEOs can offer their employees access to a wider range of employee discount programs, such as entertainment, travel and other types of business services.
Common Misconception
Sometimes, businesses hesitate to hire a PEO because they think that doing so will cause them to lose control over their company. But this is a common misconception. You still have control over your business. In fact, a typical PEO contract says that you and the PEO are co-employees who share responsibilities and liabilities. PEOs do not have any control over the business operations of a client.
Considerations and Warnings
- Another benefit of a PEO is that a workplace can become safer. A PEO can perform a safety assessment of your worksite and then devise a safety program as well as train employees on how to prevent accidents.
- Having a PEO can decrease the odds of a company going out of business. Thus, you can have peace of mind, knowing your business is secure and thriving.
- Just about any industry can benefit from PEO services.
- Although the PEO industry is just three decades old, it’s enjoyed a huge growth. Today, over 150,000 small businesses partner with PEOs.
You don’t have to spend hours drowning in paperwork and other time-consuming HR tasks when you partner with a PEO. When you’re free from burdensome responsibilities, you can be more productive and effective in your business. Questions? Please contact us at AlphaStaff and learn more about how we can help you.