Do you want to expand your business but are unsure of the steps required? If so, a professional employer organization (PEO) may be the answer.
What is PEO? A professional employer organization for employers is an outsourced professional that handles all administrative tasks related to HR and payroll.
PEOs are professional, full-service organizations that provide their clients with a number of benefits. Here are some reasons to consider hiring a professional employer organization as part of your business expansion:
A PEO can provide your business with substantial cost-savings benefits, which is especially important when cash flow may be low.
According to a study, hiring a PEO saves businesses $1,775 per year for each employee.
With this money, you could hire more employees or invest in marketing efforts for your products/services—all things that would grow revenue.
You can also save money by reducing errors in your payroll. PEOs specialize in human resources and payroll, so you can trust them to handle this for you while saving time too.
The best PEO will provide a high level of service at an affordable price and match or beat the prices offered by other professional employer organizations (PEO).
Compliance with federal, state, and local laws is an important part of running a business. However, it can be difficult to stay compliant while also growing your business.
A best-in-class PEO will provide services such as:
- Payroll processing
- Compliance audits
- Risk management training
- Tax filings
- Compensation analysis
- Benefits enrollment
- Human resource support
When you add these crucial pieces together, the result is peace of mind about staying compliant. You’ll then focus on what’s most important—running your business.
Compliance issues can be time-consuming and costly, but they shouldn’t take you away from the day-to-day operations of your business. A PEO will serve as a liaison between your company and governmental agencies to ensure compliance with all laws.
You can also expect the PEO to help you stay up-to-date on new laws and changes in compliance.
A PEO provides employers with full-time, part-time, and temporary employees. With this service, you won’t have to worry about hiring someone who isn’t a good fit or can’t stay on board for too long.
If the business is growing, then adding new staff members becomes necessary at some point. However, it can be difficult to find quality candidates that match your needs and requirements.
A professional employer organization provides staffing services and screens all applicants to ensure nothing falls through the cracks when making an important hire—a great benefit if you’re busy running your business.
When looking into potential hires’ backgrounds before bringing them onto the payroll, a professional employer organization can help you avoid costly mistakes. You’ll also have access to employees that are already trained and ready for work. This will save you valuable time when expanding your business.
With a PEO handling HR tasks such as onboarding new hires, you can focus on running your business and put the PEO in charge of administering day-to-day HR activities.
They Handle Benefits Administration
When your business grows, you may want to provide benefits for employees.
Benefits administration can be complicated—especially if the staff is in multiple locations and/or they work on different schedules. However, with a PEO handling this task for you, it becomes that much simpler.
A PEO will offer comprehensive benefits packages that include:
- Health insurance plans
- Dental care options
- Vision coverage options (where available)
- Life insurance policies (for small businesses)
- Short term disability coverage (STDs)
These benefits packages can be customized to meet your business’s needs. You can also create a benefits package that works with what your employees want.
This saves you time and money while allowing you to provide the best care for your staff without sacrificing quality or coverage levels. It’s another way a PEO helps employers grow their business by taking on HR tasks and making them easier to manage.
They Handle Your Employee Handbook
As your business grows, it’s important to have a written HR manual that outlines what employees can and cannot do. This includes:
- Procedures for completing payroll tasks
- The rules of hiring and firing staff members
- Orientation programs for new hires or returning employees
- Dress code policies (if any)
- Employee benefits information (where applicable)
A professional employer organization will create an employee handbook based on what you need while ensuring compliance with state and federal employment laws.
You’ll get a comprehensive guide to address the needs of every member of your workforce. If changes are needed, your PEO can update the document to reflect what’s happening with your business.
In addition, a PEO will offer training programs for managers and supervisors on how to handle HR tasks such as disciplining employees or understanding what an employee handbook is supposed to look like.
When it comes to what employers need, payroll is typically at the top of the list.
A PEO will handle all aspects of your payroll administration, including but not limited to:
- Completing any necessary paperwork
- Sending out paychecks for employees or direct depositing them into their accounts
- Being responsible for filing W-forms and other required documents with state agencies
- Keeping track of FICA taxes that you owe as an employer
- Managing tax deductions on behalf of employees throughout each year
Your business will be provided with a dedicated point of contact regarding payroll issues. This means you’ll have someone to call when there’s an issue.
Drug Testing Programs
As a business owner, you need to be sure that your staff is professional and trustworthy.
Drug testing programs are another way to ensure this happens. So hiring managers can verify what employees say about their drug use before bringing them onto the payroll.
Your PEO will work with staffing agencies or third-party vendors who provide these services as part of a comprehensive package for employers looking for top talent.
Many businesses choose to implement pre-employment drug testing—which helps weed out applicants who aren’t fit for certain positions. If post-employment tests are needed, then they can be completed on a random basis.
A PEO will also handle all aspects of what’s required to ensure your business stays compliant with current drug testing laws.
Click here to learn more about “what is PEO.”
Do Smart Business With Professional Employer Organization
A PEO is a valuable resource for any company that wants to provide competitive benefits packages and exceptional service levels while saving time, money, and the headache associated with hiring new employees.
If you’re looking to grow or expand your business into another country, then hiring a Professional Employer Organization is what you need to do.
We hope you now understand what they are and what benefits you’ll be able to enjoy entrepreneurial success. For more informative content, keep reading our articles.