One of the main selling points of a PEO is that it can deliver much more in terms of employee benefits than many companies would be able to do on their own.
In a world where individuals have the freedom of movement, being able to earn their loyalty is important. So does this make PEOs essential?
How Do PEOs Help Improve Employee Benefits Options?
The simple answer to this is that PEOs can manage thousands of employees. When structuring benefit plans (along with things like insurance), they are able to get much better deals than individual companies with far few employees. That’s just the way these kind of deals work.
When you start working with a PEO, they become the co-employers of your staff. They take on various HR functions for you to save you money on doing them in-house. In addition, they add their considerable expertise to help you improve the way you manage your human resources.
Not at all, co-employment is merely the situation where the PEO takes responsibility for the personnel functions for the employees, while the business itself still has ownership of the day to day tasks and running of the core operations and decisions.
Co-Employment, That Sounds Scary…
Not at all, co-employment is merely the situation where the PEO takes responsibility for the personnel function for the employees, while the business itself still has ownership of the day to day tasks and running of the core operations and decisions.
The PEO helps in other ways. However, it isn’t in their interest to unnecessarily interfere when not needed or wanted. The only real disadvantage to using a PEO for this kind of service is that you of course have to pay them to do it, though fees vary.
Required Kinds of Employee Benefits
Required employee benefits
Employee Benefits work differently in different countries. The United States requires the following:
- Time off to vote, do jury service and military service
- Meet compensation requirements
- Withhold FICA taxes from paychecks
- Pay unemployment taxes which provides benefits for unemployed workers
- Comply with FMLA (Federal Family and Medical Leave.
Optional employee benefits:
- Retirement plans
- Healthcare (this is required in Hawaii)
- Dental plans
- Insurance plans
- Paid vacations and sick leave (Vary from State to State)
Although not be legally required. many companies – particularly large organizations – are stepping up. They are offering paid vacations for national holidays in addition to a couple of weeks of vacation. This is less than in other countries.
This is where smaller firms struggle to attract top talent. They struggle to compete with the benefits being offered in the marketplace.
Common Problems with Offering Employee Benefits
If you’re a small business that is trying to compete with the big boys for top talent, these are the kind of issues you can often face:
- Paperwork. With potentially small (i.e., one person) human resources teams, they are likely stretched thin. Dealing with employee benefits in addition could be overwhelming. Mistakes are often made and potential opportunities missed. This may lead to over-payment and unsatisfied employees, and even possible legal action.
- Naivety. Without the experience a PEO brings, you could be paying a lot more than is necessary. Some employees may already be receiving coverage through a family member. They don’t need what you’re offering but take it because you’re paying for it. You could be the ones paying for family members when you really can’t afford to be doing so. Therefore, you may giving benefits to employees that they don’t really need or want them.
- Lack of clarity. If the benefits you offer are being arranged by an overwhelmed member of your staff, they overlook doing things that are beneficial to you, such as ensuring that your employees recognize what you are giving them. If they do not get a statement detailing what you are spending on their benefits, they might not appreciate what they have and be on the look-out for something better.
- Not negotiating. Again, if your benefits package is being sorted by a human resources manager with a lot more on their plate, how can you expect them to be able to do the research to find the right price and to negotiate the best deal possible? With a PEO, as well as the power of the combined negotiating clout, you’ll also get the staff with the time to look around for the best deal for your employees.
What Are The Next Steps?
According to a survey by Xerox last year, 53% of HR professionals say that the highest priority for them in 2017 was to retain top talent, while a survey by OneMedical revealed that 69% of employees say that they might choose one job over another if it offered better benefits.
Sybil F. Stershic of the American Marketing Association summed up the importance of keeping workers feeling valued:
“The way your employees feel is the way your customers will feel. And if your employees don’t feel valued, neither will your customers.”
If you are looking to retain or attract new employees, the benefits that you can offer are imoprtant. You can’t afford to get them wrong.
If we’ve convinced you that you need to get help with how you deal with your employee benefits, how can EasyPEO help you get on the right track?
Your human resources staff is overworked. Adding ‘researching the right PEO’ to their workload is not likely to help matters.