Professional Employer Organizations (PEOs) provide businesses with comprehensive HR solutions. A PEO may recommend a wide range of services to small- and mid-sized companies, such as payroll, benefits, recruitment, hiring, compliance assistance, unemployment administration and workers’ compensation administration. Businesses that choose to outsource these tasks often find that they have more time and energy to devote to core business strategies for optimal growth.
Although there can be significant benefits associated with using a PEO, it can sometimes be challenging to identify which of the over 900 PEO’s in the market are the best fit for your business. . That is where a benefits broker can be of assistance. Experienced benefits brokers can help enterprises to find a PEO that is best suited for the company’s industry and size. Here is a look at how a benefits broker can help businesses find the right PEO for their business.
Determining the Needs of the Business
Before a benefits broker can recommend a PEO, the broker must first determine the business’s unique needs. Professional employer organizations offer a wide range of services to businesses that help eliminate time-consuming paperwork, allowing employees more time to focus on growth-driven tasks.
Services like payroll administration, risk mitigation, development of employee harassment policies, and compliance with state and federal labor regulations can ensure that businesses are completing necessary tasks without wasting the talent of hired employees.
Some businesses choose to hire a PEO because they do not have the time or funds to retain full-time, in-house HR staff. Signing a co-employment agreement with a reputable PEO can often be a more convenient and cost-effective option. A PEO generally charges a business based on a percentage of payroll or by a flat rate per employee per month in exchange for services.
Advantages of Using a Benefits Broker
There are several key advantages to using a benefits broker to find the right PEO for a business. Some employers will reach out to each PEO to hear the sales pitch directly from the sales representative. With so many PEO’s in the market, this can be an extensive and time consuming process. An experienced benefits broker can help narrow down the search to the few most suitable PEO options while also helping negotiate rates by utilizing the competing quotes to the client’s advantage.
Benefits brokers look at each client’s unique situation and then analyze the market to help them acquire the right coverage based on their needs. These professionals can provide a wide range of benefits to a business, such as compliance information, contract review and negotiation, direct assistance to employees, advice on minimizing costs, help in resolving problems and education for employees.
While a PEO may sound like a great solution for a business, on average only 1 out of 10 companies are actually better suited in an outsourced HR relationship. Benefits brokers are usually licensed professionals with extensive knowledge on a wide range of topics that can be invaluable when choosing a PEO. Unlike direct sales reps, benefits brokers will often provide an unbiased recommendation that reflects what is in the best interest of the business rather than the broker’s firm.
Choosing the Right PEO for a Business
It is important not to hurry through selecting a PEO as this organization will be responsible for handling many important aspects of the business and implementing a PEO can be a tedious, time consuming project for all parties involved.
Before making a decision, assess the workplace to determine its risk management and human resource needs. The PEO that is chosen should meet the business’s goals and help resolve problems that may arise with HR-related tasks. It’s beneficial to ask past clients’ references to understand its history and reputation better. Prospects can also check to see if the PEO is a member of NAPEO, the PEO’s industry’s most widely-known national trade association.
Take time to investigate the organization’s management and administrative expertise. Consider the number of years that the organization has in the industry and its staff’s educational background and training. Businesses interested in PEO services should also confirm that the PEO is IRS-certified and can legally pay federal employment taxes under an EIN. This helps protect customers by requiring that the PEO assume liability for any wages paid to employees at the worksite.
Speak with an Benefits Broker
Managing the operations of a small- or mid-sized business can be highly challenging. Many businesses want to invest their time and people in new projects designed to facilitate growth but cannot due to time constraints. Delegating mundane tasks like payroll, benefits and compliance can help give companies the time they need to dedicate towards growing the business and challenging their employees.
Working with a benefits broker is one of the best ways to find the right PEO for a business. For more information about how a benefits broker can help businesses find a great PEO, speak with the experts at New City Insurance today.