Tag Archives: PEO

Need a Professional Employment Organization? What to Look For

Human resources and employee management related tasks are a critical component to any business regardless of size. But unfortunately, they can be incredibly time-consuming and often stressful. According to Entrepreneur, “from payroll and human resource management to benefits and compensation, entrepreneurs can spend up to 40 percent of their precious day engaged in these necessary but time-sucking tasks.”

One trend that’s catching on is outsourcing to a professional employment organization (PEO) to save time and money. Here’s what to look for when choosing a PEO to ensure that you find the right fit for your business.

 

A Positive Reputation

First and foremost, you want a company with a proven track record of success. Ideally, they’ve been in the industry for at least a decade and have helped numerous businesses with their day-to-day operations. A PEO should be able to provide a solid list of references, preferably of businesses in your same industry. They should also have positive testimonials and/or reviews from unbiased clients who have first hand experience.

 

Comprehensive Services

Each business will have its own specific needs, and a PEO should be equipped to handle all aspects of your employee management and HR operations. Even if you only have minimal needs initially, this could easily change a few years down the road, so you want to look for an organization that can help you grow. For example, a legitimate PEO will offer a variety of services including:

  • Payroll processing
  • Benefits management
  • Assistance with hiring and termination
  • Employee performance evaluation
  • Policy development
  • Worker’s compensation
  • Risk management
  • Regulatory compliance

When making your decision, be sure that a company’s services are capable of handling both your current and projected needs for the future.

 

A Variety of Employee Benefit Plan Options

Employee benefits are often necessary for acquiring top industry talent and keeping these individuals around for the long haul. Consequently, it’s helpful to choose a PEO that can assist you with benefits management and offer a robust variety of options. While health and retirement benefits are a good starting point, it’s ideal for an organization to offer other services such as:

  • Life
  • Dental
  • Vision
  • Disability
  • Voluntary benefit plan options

This should ensure that your employees are fully covered and have access to the benefits that they want.

 

Outstanding Customer Service

It’s inevitable that you’re going to have questions and concerns at some point. That’s why you want a PEO that’s fully committed to customer service and that can be reached whenever you need them. Ideally, there will be no extra charge to speak with a representative, and there are enough representatives available at any given time to efficiently help you without hassle.

Rather than having to go through a call center where you can get lost in the mix, it’s best to have access to a dedicated support staff that’s able to handle your unique needs and provide you with a personal touch.

There’s no doubt that a professional employment organization can be a huge asset for businesses across numerous industries. When you look for these elements in a PEO, you’re likely to find a firm that’ll mesh well with your business and help you succeed.

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Understanding Co-employment

The concept of co-employment where an employer outsources tasks to a professional employer organization (PEO) has gained some serious ground in recent years. According to a survey by the National Association of Professional Employer Organizations (NAPEO), “it is estimated that 2-3 million Americans are currently co-employed in a PEO arrangement. The average PEO has grown more than 20 percent per year for each of the last six years.”

Due to the results that many companies have experienced, co-employment is attracting the attention of more and more business owners. Let’s now discuss the basics of this type of arrangement to help you get a better idea if it could work for your business.

 

What is Co-employment?

The proper definition is “a contractual allocation and sharing of employer responsibilities between a professional employer organization (PEO) and client.” Simply put, you outsource various tasks to a third-party and they help you run your business more effectively and efficiently. There is a high degree of customization with this arrangement, so you can determine how much or how little you want to outsource to a PEO. Some companies only outsource a handful of tasks, while others opt for a large percentage.

 

Co-employment is a Partnership

With this type of relationship, you transfer many responsibilities to a third-party. You’re collaborating with a professional firm that will handle the duties that you either don’t have the time for or don’t feel comfortable with doing on your own. You also minimize some of your risks because and don’t have the sole burden of ensuring compliance with laws and regulations. A PEO maintains a certain level of control over the direction and culture of your company because they have the right to hire, reassign and terminate employees.

 

Common Services of PEOs

Although PEOs can run the gamut in terms of the specific services they provide, some common ones include:

  • Hiring, training and terminating employees
  • Benefits management
  • Assessing performance
  • Payroll processing
  • Tax compliance
  • Risk management

These firms understand that each business is unique and there isn’t a one size fits all formula. Consequently, they are usually willing to work with you and determine the best approach for your company.

 

Benefits of this Work Arrangement

By outsourcing a portion of responsibilities, it gives you more time to focus on the overarching vision of your company. You won’t be bogged down with as many redundant or time-consuming tasks, so you can concentrate on your natural strengths to grow your business. This should lead to increased productivity and less stress.

You can also minimize your amount of risk dramatically. Because a PEO will have an in depth knowledge of laws and regulations, as well as the inner workings of the EEOC and OSHA, this can greatly reduce your odds of getting hit with fines or lawsuits.

Finally, you can expect to see higher profitability over time. With many tasks that were formerly arduous becoming streamlined, you can improve performance across the board. Better quality goods or services combined with talented employees and regulatory compliance is a realistic way to increase your profits.

Although making the transition to co-employment takes time, it’s usually well worth the effort when you look at the big picture. While it’s not for everybody, you should definitely take it into consideration if your business isn’t currently operating with the level of efficiency you’re looking for.

Getting Started with a PEO

What’s a PEO and How Will it Help My Company

Operating a business of any size comes with challenges, and many business owners find it difficult keeping up with the daily barrage of tasks. As a result, many small to mid-sized companies choose to outsource a portion of tasks to a professional employment organization (PEO).

According to the National Association of Professional Employment Organizations, “PEOs enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.”

 

How a PEO Works

The premise is pretty simple. Business owners outsource a variety of tasks to a PEO such as employee acquisition, payroll processing, performance management, worker’s compensation and employee benefits. These are primarily HR and administrative duties that are often too time consuming for a company to do on its own.

Business owners may also delegate tasks where they need guidance and aren’t equipped with the necessary knowledge to adequately complete. For example, things involving government compliance may be outsourced to reduce a company’s liability and lower the chances of lawsuits.

Now that we know how a PEO works, here are some of the ways it can help your company.

 

Fewer Administrative Responsibilities

Even fairly small businesses have to deal with a plethora of administrative tasks on a continual basis. You probably already know what a hassle these can be and how it can prevent you and your employees from working on what’s really important…growing your business. By outsourcing some of these responsibilities, it can free up a considerable amount of time so you can focus more on sales, marketing and overall growth.

Consequently, it’s common to experience increased productivity, while lowering your stress. Because a PEO will have in depth knowledge and experience, you know that your administrative tasks are in good hands. In many cases, outsourcing means an even higher level of professionalism with task completion than if it was done in-house.

 

Reduce Your Costs

Any time there are inefficiencies, it can increase your operational costs and put a damper on your profit margins. Whether you’re overspending on staff, or spending excessive time on administrative duties to the point where you can’t focus on sales, this can be a serious detriment to success. A PEO is beneficial because they help your business become leaner and operate at optimal efficiency.

According to the Department of Labor, “a PEO can handle its administrative responsibilities at one-third to two-thirds of the cost an average business would incur to provide similar services. Some of the savings are achieved through staff reductions.”

 

Reduce Your Liabilities

Staying compliant with federal and state laws is extremely important in today’s workplace. As a business owner, you have to deal with OSHA regulations, equal employment laws and a host of other rules. The problem is that laws are continually changing, and it can be difficult to stay on top of everything.

Outsourcing to a PEO is helpful because they always know what’s going on in terms of rules and regulations. In turn, they can help you fine-tune business operations and develop policies to ensure that you remain compliant. This greatly reduces any liabilities on your end and can prevent you from getting into legal backwater.

If you’re having trouble keeping up with HR and administrative tasks, a PEO is definitely worth looking into. Not only can it simplify operations and make your life easier, it can also save you a significant amount of money.

 

 

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How PEOs Can Increase Small Business Productivity

Are you overwhelmed by the everyday tasks in your business? Whether you’re a new start up that needs guidance, or have an established business that’s growing – you can get help with the workload by using a Professional Employer Organization (PEO).

They provide an outsourced HR solution and handle tasks like payroll processing, benefits management and personnel administration – everything you need to keep employees happy and your organization compliant. Here are some ways that PEOs can increase small business productivity and promote long-term success.

 

Attracting Top Tier Talent

To truly thrive in any industry, your company needs a team of qualified professionals who are experts at what they do. Your team members must possess the right skills and talent, all while having the dedication to consistently perform their jobs at a high level. One of the best ways to attract top tier talent is for a business to provide benefits like a 401(k) or similar plans, health insurance, life insurance and flexible spending accounts.

Many times, these benefits are an influential factor for professionals when deciding between employers. Because retirement and similar plans are relatively rare for smaller businesses, having some in place can be a great selling point.

According to a 2011 Towers Watson Survey, “47 percent of employers cited retirement benefits as an important reason to stay with their current employer, and 35 percent viewed retirement benefits as an important reason they decided to work with their current employer in the first place.”

When a small to mid-sized business is able to use these benefits as leverage, it can expect to acquire a knowledgeable and capable workforce. Consequently, these employees should have what it takes to streamline daily tasks and it’s realistic to experience expedited growth. There is also a stronger likelihood of a higher retention rate among employees because of deeper job satisfaction. With a lower turnover rate, team chemistry can be developed and overall small business productivity should increase.

 

Gain Freedom to Focus on Other Key Tasks

By allowing HR specialists to handle arduous and sometimes difficult tasks like employee training, safety management and performance evaluation, it can quickly reduce your workload. Rather than spending an exorbitant of time in these areas, you have the freedom to work on other things that grow your company – like improving your marketing and your internal processes.

Whether it’s giving customers or clients more attention or launching a new marketing campaign, you can increase small business productivity. You can rest assured that their human resources tasks are left in the hands of qualified specialists. With an outsourced HR solution offering personalized service, your business can get the specific package needed to maximize efficiency.

Having happy employees and not being bogged down with excessive responsibilities are important for your business to thrive. Fortunately, outsourcing to the right PEO can be a huge help and provide the necessary tools to rise above the competition.

 

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