Are you a small business, start-up operation or a mid-sized business owner looking to free up more time? Maybe you should consider the services of a Professional Employer Organization (PEO). A PEO may be one of the best-kept secrets contributing to the success of small to medium-sized businesses. With your administrative and human resources tasks taken care of, you have time to focus on more important aspects of your business such as updating your business plan, keeping your customers happy, and ultimately – making more money!
A Brief History of PEOs
The earliest beginnings of PEOs in the U.S. were in the 1940s with people beginning to discover co-employment. As time progressed, by the late 1960s and early 1970s, the concept took off, partly due to the success of a popular consultant, Martin Selter, who began a PEO for a doctor’s office in Southern California. Current statistics show there are approximately 780 to 980 PEOs currently operating in the U.S. employing more than 2.7 million people. Industry forecasts show the PEO industry is expected to have better than average growth in the coming years. It is an industry serving more than 150,000 small to mid-sized U.S. businesses.
Now on to some important ways that a PEO saves time and money:
1) Human Resources
By joining forces with a PEO, you can outsource many routine human resource tasks. The PEO has a co-employer relationship with your employees so they can manage tasks while you as a business owner still retain control of employee supervision to the degree you desire. If you choose to do so, however, you can delegate such tasks as regulatory compliance, unemployment claims, employee handbook development, and employee benefits. You can be as hands-on or hands-off as you choose.
2) Payroll/Benefits
With a PEO, you aren’t going to need a full-time staff dedicated to prepare your payroll or administer your benefits packages to employees. With the PEO’s access, it may even be able to secure you a more favorable benefits package than you would have access to on your own. We all know great benefits packages attract top talent for your company. Here is a perk of PEOs that you may not even have considered – lower workers’ compensation insurance rates. How is that possible? The PEO may have agreements with insurers (or have negotiating power) to secure insurance coverage at a lower price.
Another great time-saver a PEO offers is taking care of tracking employee leave requests. Federal and state law regulations dictate that careful records are kept of employee leave time, including time used for family and medical leave. Federal employment laws mandate employee leave time be granted for personal and family-related illnesses and conditions. The Family and Medical Leave Act (FMLA) has specific regulations for employees governing guaranteed time off (up to 12 weeks of unpaid leave per year) for health conditions or to care for a family member. As an employer, you are required to continue to provide health insurance benefits to these employees and once they return to work, these employees must be restored to their same or equivalent positions.
3) Compliance
The number of organizations that require regulatory reporting is growing by leaps and bounds. A PEO can help you with state and federal compliance reporting requirements including employee-related documentation for ADA, OSHA, payroll, etc. Without regulatory compliance, your business could face fines or even worse, put employees at risk by failing to meet mandatory safety (OSHA) requirements.
As you can see, a PEO saves time and money in clear and noticeable ways. Whether you are a large or small business owner, a PEO has benefits that can make your life a whole lot easier. If you want to find out more about how you can use a PEO to claim back your time, visit our website for more information on how we can help your business operate more efficiently. You should be working smarter – not harder!