Employees are the fundamental cornerstone of any business. However, if employee-related issues are not properly handled, they create enormous liability for your organization. This, along with many other HR-related issues, is where a good PEO (Professional Employer’s Organization) can help.  When you outsource your heaviest HR burdens to a PEO, you get more than just a payroll and benefits processing company—you also get:

    • Trusted advisors who can guide your organization on a wide scope of employment issues, including training and employee relations support;
    • Access to a wide variety of employee benefits programs, at a lower cost, to help you improve your recruiting and retention efforts; and
    • Assistance with a variety of administrative functions, including background screenings, drug testing, hiring and onboarding, performance management, disciplinary action and terminations, payroll, benefits, leaves, and unemployment and workers’ compensation claims.

Combined, all of these factors have the potential to transform your HR business model and help you achieve greater HR compliance.

So, what exactly is a PEO?

A PEO is an organization in which your company enters into a co-employment relationship, acquiring many of your HR responsibilities so that you can focus on your core business functions. While your employees become co-employees of the PEO and your company, you always retain control of your business and the work functions of your employees. Here we discuss seven of the best benefits of a PEO:

  1. Cost-Effective Benefits
    • PEOs offer a wide range of benefits through their sponsored plans.
    • They handle all related administrative tasks:
      • negotiate with carriers
      • enroll employees
      • provide legal notices
      • COBRA administration
      • FMLA administration
    • They also provide benefit plan information online and enrollment tools to give your employees easy access to their benefits information.
  1. Payroll Cost Reduction

With automated processes, PEOs handle the payroll processing as well as employer tax liabilities and W-2s.  This creates efficiencies in your payroll processing and often saves you some money.

  1. 401k and FSAs

Everything from retirement savings programs that include 401(k) plans, Flex-Spending Accounts and more can be handled through a PEO. These programs are often cost-prohibitive for single employers and contain many compliance-related traps.  PEOs offer employers access to these types of benefit programs and handle the administrative responsibilities, compliance testing, distribution processing, regulatory requirements, and required notices.

  1. Compliance – Employment Law is Complicated

If you’re not up-to-date with regulations, HR laws, and rules, the consequences can be very costly. State and federal agencies don’t mind imposing hefty fines for non-compliance. As your partner, your PEO will guide you in staying on top of developments in all of the markets in which you operate and help you avoid common pitfalls.

  1. Workers’ Compensation Claims Administration

Handling workers’ compensation is difficult – from insurance premiums to claims management, the process can be time-consuming and costly. When you engage a PEO, coverage for your employees can be provided through the PEO’s sponsored workers’ compensation policy.  The PEO will then handle the paperwork, audits, compliance, and follow-up on your employees’ claims. Typically, your business will have access to a dedicated team of workers’ compensation specialists; they can help you mitigate risk while ensuring your injured employees are cared for appropriately.

  1. Recruiting and Hiring

Use a professional PEO to screen applicants and make sure the right candidates get to your desk for review. PEOs can also handle the development of employee handbooks and manuals, and streamline the onboarding process by assisting with post-offer testing and new hire paperwork. These professionals make the hiring process smooth and efficient, and outsourcing some of these recruiting processes to a PEO can save money and provide freedom for you to focus on profit-making functions.

  1. Organizational Growth

The argument for outsourcing portions of your human resources tasks is a compelling one. According to the National Association of Professional Employer Organizations (NAPEO), businesses in a PEO arrangement:

    • have 10%-14% lower turnover;
    • grow 7%-9% faster; and
    • are 50% less likely to go out of business

Plus, according to NAPEO, since the pandemic, relative to comparable small businesses, PEO clients:

    • Are 58 percent less likely to have permanently closed
    • Are 32 percent less likely to have seen a negative overall effect on business from the pandemic
    • Are 82 percent more likely to have business operations back to normal (or better)

To find out more about ways in which AlphaStaff can help simplify your business with tailored HR outsourcing services, please contact us at 888-335-9545.