Deciding to partner with a PEO is an important decision that requires research and guidance. PEOs are known to offer benefits that enable your business to increase efficiency. They also allow you to focus on your core business activities. However, that doesn’t necessarily mean that they are automatically a good choice. There are five indicators that can help you decide if your business is a good candidate for a PEO partnership.
Who Will Benefit From a PEO Partnership?
All sizes of business can benefit from a PEO partnership. Since the PEO assumes the tasks of payroll, benefits administration, taxes, and workers’ compensation, the client business has more time available to focus on and manage the growth and operation of the business. Five areas to consider before entering into a PEO arrangement are:
Vendor management can often require many hours of office time each week. You may be better off allowing a PEO to handle negotiations with recruiters, insurance brokers, accountants, payroll administrators, and safety specialists. Your PEO can assist with choosing your vendors and properly integrate them into your business operations. The PEO can also manage interactions with vendors and evaluate their performance regarding your needs and their service.
Administrative Workload Reduction
Certainly, you want to reduce your administrative workload. Your PEO can expertly handle many of the tedious and mundane tasks that eat up time that could be used for focusing on operations that create profits for your business. Having your business tax forms, workers’ compensation, employee onboarding and handbooks, handled by an expert can greatly relieve your business from having to deal with non-revenue producing activities. Many PEOs also offer a Web portal for all employee interaction.
Reduced Costs for Employee Benefits and Workers’ Compensation
Because your PEO partnership allows the PEO to become the employer of record, your employees can be aggregated with other PEO business clients resulting in lower rates for health benefits and workers’ compensation. Being a part of this large group of employees allows your business to compete on a level playing field with much larger companies. Your PEO will typically offer medical insurance, including dental and vision, an attractive retirement plan, educational assistance plans, and short and long-term disability coverage.
Increase Focus on Growing Your Business
By outsourcing your daily administrative tasks to PEP experts, you immediately free up time to focus on growing your business. Your company retains complete control of employee management, hiring, core job functions, and the structure of your organization.
Regulatory requirements and tax filing require committed attention to details and deadlines. The lack thereof can result in having to pay unnecessary fines and significant penalties. By transferring these important tasks to PEO experts, many businesses realize a return on investment by eliminating unnecessary penalties and fines.
Other Services Your PEO can Provide
Many businesses, especially those in manufacturing and distribution, pay enormous premiums for their workers’ compensation insurance. Your rate be reduced from aggregating your employees with those of other businesses. Additionally, your PEO can offer safety and risk management audits that will typically result in reducing your modification factor. They also assume the role of workers’ compensation claim management and develop necessary return-to-work programs for injured employees.
If your business is spending too much time on administrative tasks such as:
- tax filing
- regulatory issues
- benefits management
then you are very likely a great candidate for a PEO partnership.