Employers have to spend a lot of time and effort to manage human resources, to stay compliant with local laws and labour regulations, even if the business is small or mid-sized. Staying focussed on the core business amid stiff competition is no easy task.
PEO or a Professional Employer Organization is an organization that that takes on the responsibility to manage all employee-related obligations. This could be related to employee compensation, benefits, and payroll administration. Outsourcing employer’s responsibilities to a PEO will significantly reduce the workload for any employer. Once the administrative burden, employer’s responsibilities and the legal liability have been outsourced, the client company can just focus on core business activities.
Do Small Or Mid-Sized Businesses Need PEO Services?
HR administration could consume a lot of time and effort and take away the focus on revenue-generating opportunities and hence damage the growth of the business.
A report from NAPEO or National Association of Professional Employer Organizations indicates that businesses associated with PEO organizations observed 7%-9% faster business growth, have reduced employee turnover from 10%-14%, and are 50% less likely to cease operations when compared with competitors.
Partnering with a PEO will provide better infrastructure, resources, and free up time so that businesses can focus on other opportunities to improve their growth.
3 Benefits Of Using A PEO Service
With the help of a PEO, most HR-related responsibilities are outsourced and thus allow employers to focus on mission-critical endeavours.
1. Provide Better Benefits To The Employees
PEO has shown its success in offering better benefits options to the employees by leveraging better deals from insurance providers when compared with regular small or mid-sized business.
Some of the benefits the employees could avail are:
- Medical coverage
- Retirement plan
- Commuter benefits
- Assistance on Education
2. Risk Reduction
When a business associates with a PEO, it could reduce the risk associated with
- Claim resolution and EEO reporting
- Employee Practice Liability Insurance or EPLI Management
3. Cost Reduction
PEOs not only help the businesses to save time but also help in cutting cost. In addition, they facilitate:
- Attracting skilled employees and employ good hiring practices.
- Reduced staff turnover and high employee satisfaction.
- Clear strategic planning from a human capital standpoint.