5 Ways PEOs Can Help Businesses Succeed
September 24, 2020 | Alaina Riley
If there was one thing that could make any business successful, everyone would be doing it. So, why aren’t all businesses using a Professional Employer Organization (PEO)? A PEO is an outsourced solution for payroll, human resources, benefits and compliance.
Statistics have shown that business owners who use a PEO have seen employment grow 7%-9% faster compared to small businesses overall. If your business could use some extra TLC, a partnership with a PEO could be the answer.
1. Improved compliance
Nobody knows compliance quite like a team of HR professionals. PEOs assist with helping the business stay compliant when it comes to onboarding, offboarding and everything in between. This partnership provides dedicated HR professionals to monitor business practices and assist business owners with staying up to date on policies and procedures.
2. Business owners get to focus on their core business
Working with a PEO gives business owners access to a wealth of knowledge and support. The PEO relationship removes the burden of human resources, payroll and benefits administration from the shoulders of the business owner. This allows them to focus on growing their core business. The business owner can relax knowing that the administrative tasks are taken care of.
3. High-quality benefits
Partnering with a PEO gives business owners access to a rich suite of benefits. Offering a robust benefit package shows employees that the business owner is invested in their health, well-being and their future. Offering high-quality benefits can help employers stand out among the competition in the job market, as well as help to attract and retain valuable employees.
4. Combat rising health insurance premiums
Many business owners feel the Affordable Care Act (ACA) is their only option for small group health insurance needs. The quality of these health insurance plans is on a downward slide while premiums continue to rise. PEOs work with multiple small employers to harness the buying power of thousands of employees. This unique model allows the PEO to approach the health insurance market as one large employer. Business owners are given discounted rates on health insurance compared to what might be available within the small group market.
5. Payroll processing
One major benefit of using a PEO is the ability to outsource the task of payroll processing. The role of the PEO is to accurately calculate gross to net payroll, file taxes, forward garnishments, manage all other deductions, and distribute checks or direct deposits. Payroll processing services may also include facilitating quarterly reports and processing W-2s at year-end.