Running a business isn’t for the weak-hearted. Especially for small business owners, you may not have enough minds and hands to do efficient work for your human resources. Many tasks need your utmost attention, affecting your mental and physical health. Thus, a PEO partner may be the ultimate lifesaver.
A professional employer organization (PEO) is a type of co-employment human resource outsourcing, effectively filling small companies’ management gaps. PEOs handle various employee administration tasks for a company, such as a payroll and talent management.
No two PEO partners are alike, as some PEOs offer services such as strategy advice, while others don’t and specialize in benefits administration. Hence, it’s essential to do your research before investing in a PEO partner.
We can assure you that PEOs can help your small enterprise grow and foster. However, knowing whether a PEO can benefit your small enterprise is vital before researching the different PEO companies. Here’s a listicle of business areas PEOs can help you with.
1. Payroll and tax management
Unless you’re an accountant, you probably don’t understand tax law. Accountants spend many years studying the nooks and crannies of taxation and its regulations. Therefore, people wouldn’t expect you to know everything and anything about taxes in a snap, as it takes years and a significant amount of effort to master.
Hiring accountants may help you in this matter, as payrolls and taxes are their playing field. However, PEOs can also help you in this aspect and even provide you with more than an accountant can offer.
Like accountants, PEOs can handle your yearly accounting. They can provide payroll services to ensure your workers get paid on time. Along with your employee’s monthly salaries, PEO partners can aid in the ethical deduction from each employee’s wages. They can also be familiar with state and federal taxation.
With the surge of the digital world, PEOs can provide you with an online platform where you and your employees can view your monthly payrolls for easier access. This online platform also ensures additional transparency for a healthier owner-employee relationship.
Read Also: Payroll Management for Small Businesses: Everything You Need To Know
2. Low-cost benefits and benefit administration
As a budding small business, you’re at the stage wherein you’re establishing financial stability. Hence, unnecessary expenses are a big no-no. PEOs can help you in this aspect too.
The law urges that companies give employees healthcare insurance as part of their human rights. However, healthcare can be expensive. PEOs allow you to save money on major expenses such as healthcare because they provide more options than a small business would typically have.
PEOs can help you scout for healthcare bundles for your and your employees’ benefit. Their services provide increased access to high-quality, low-cost health insurance, dental care, retirement benefits, and other employee perks.
Typically, the PEO will also handle employee enrollment and claim processing for these benefits, making work more manageable, especially for businesses with numerous workers.
3. Employee retirement savings
Along with health insurance, your employee’s retirement funds are also a fundamental human right that you need to secure. One of the most common benefits of hiring PEOs is their access to retirement savings plans.
A retirement savings plan, such as a 401(k), allows employees to save money when they no longer work. However, selecting a plan and handling health insurance is a complex, detail-intensive process.
If you’re a PEO client, you’ll get advice on which options to go for from the various retirement savings plans offered to you.
4. Talent sourcing and employment
We have established that PEOs can provide additional access to retirement plans and health insurance. But, PEOs also offer access to more than just employee benefits.
A business can’t run smoothly just by a good business owner. It’s a collective effort of hardworking and talented employees. Thus, you must only hire the best employees for greater chances of business success. However, identifying and reaching out to the best candidates can be challenging. Posting to the right job boards and sorting through resumes takes days, and the process can cost a lot.
Because they have access to various recruitment networks, PEOs can frequently assist their clients in assembling a pipeline of qualified candidates. Once an influx of applicants has submitted their resumes, PEOs can filter the candidates that have met your standards.
With PEOs already doing the tedious hiring process, you can focus on interviewing and uncovering the applicant’s best assets. Afterward, the best pool of workers will be in your care.
5. Employee management and training
PEOs don’t just stop their services in talent hiring. They also specialize in employee management and training for the long-term benefit of your business. As a small starting business, inevitably, you may not have the most experience in the business world.
PEOs have much experience in training employees to the best of their abilities. Compliance and skill-based training programs can help employees develop as they grow with your company. Additionally, PEOs that offer new hire training programs can assist you in making an excellent first impression on employees.
6. Compliance expertise
You’re responsible for caring for and compensating your workers as a business. Hence, you must pay compensation, and unemployment costs must most likely have workers’ compensation insurance.
With a PEO, you may access risk and compliance experts who are knowledgeable and up-to-date on current employment regulations. To avoid unnecessary stress, they can assist you in developing address a wide range of employer-related requirements. These include tax reporting requirements, unemployment insurance, workers’ compensation, the Affordable Care Act (ACA), leave and disability laws, and more. Knowing these are necessary because labor laws may differ from country to country.
PEOs Can Be Your Business’s Best Friend
Running a business is a heavy task. Businesses, specifically small starting companies, would need all the help they can get. The business world is also not for the weak-hearted with its tough competition and fluctuating market behavior. Thus, as the saying goes, no man should not be an island, especially in a competitive business scheme.
Fortunately, PEOs can be your business’s best friend. Using a PEO allows you to outsource tasks you don’t have the time or expertise for, aiding you in business development. PEOs aren’t just for big companies but can also help grow small businesses; ultimately, partnering with a PEO depends on what’s suitable for your organization.
About the author
James Peters is a dynamic leader in the world of HR and Global Mobility. After a long career in helping businesses develop global programs and corporate expansion plans, he is now the president of Global Expansion — a company helping startups and Fortune 500 companies in need of complete and streamlined Employer of Record (EoR) solutions. In addition, James shares his expertise through business mentorship and writing.
