Growing a business requires time, commitment and the ability to delegate tasks appropriately. When business leaders spend too much time focusing on human resources, they cannot dedicate themselves to core strategies that facilitate growth. When HR demands become too much, businesses often turn to PEO services for assistance.
What Is a PEO?
A professional employer organization (PEO) is an outsourcing option for businesses that want to delegate time-consuming tasks like HR, benefits, payroll, compliance and workers’ compensation.
This all-inclusive solution begins when an employer enters into a joint-employment relationship with a PEO by leasing employees to the employer. The PEO is then entitled to manage and share various employee-related responsibilities and liabilities with the employer.
PEOs that partner with businesses form a legal arrangement referred to as ‘co-employment.’ Under this type of arrangement, the PEO acts as an “employer” to the business’s workers for special situations.
Although the actual employer retains complete control of the company, its employees, and all hiring and firing decisions, a PEO will step in to handle various aspects of the business, such as HR and benefits.
Benefits of Hiring a PEO
Professional employer organizations provide businesses with a convenient, all-in-one HR and compliance solution. With a PEO, companies can avoid the hassle of outsourcing essential business tasks to multiple insurers, specialists and vendors. A PEO can provide many essential services, such as:
Payroll
A PEO will handle all aspects of employee payroll, including documentation, tracking, deductions, garnishment, taxes, and sick and vacation day accrual. PEOs generally provide employees with access to services like direct deposit, online pay stubs and digital W-2s. Employers are given periodic payroll management reports and records.
Employee Benefits – PEOs can give businesses access to a large selection of benefits plans at competitive rates. Plans such as medical, dental, vision, retirement savings and similar benefits can ensure that employees have the benefits they need for good health and wellness. A PEO can also recommend other benefits, such as life insurance, educational assistance, Flex accounts and disability benefits.
HR Administration
When businesses are unable to fulfill the role of human resources properly, they can depend on a PEO to act as the HR department on the employer’s behalf. PEOs can provide employee verification, employee manuals, termination support, liability management, drug testing and can even assist in new hire onboarding. A PEO can perform on their own or as a team with the business’s existing HR department.
Recruiting
Hiring new employees can be a time-consuming and complicated process. A PEO can help employers in the hiring process by developing strong job descriptions and hiring managers to identify top talent.
Performance Management
Every good employer knows that good performance by employees should be rewarded. To help the top performers feel like valued assets to the company, perks may be offered to employees that meet certain requirements. A PEO can help determine who the top performers are by conducting employee evaluations and providing workers with the resources and tools they need to better themselves.
Compliance
Certain businesses are required to meet regulatory compliance guidelines, including Affordable Care Act requirements. A PEO can provide business owners with guidance on ACA requirements or employers can choose to allow the PEO to handle all aspects of compliance on their behalf. Businesses that consistently meet compliance do not have to worry about harsh penalties.
Training and Development
Employees should always strive to do better and businesses can greatly benefit from increased productivity and performance. PEOs can help in this regard by helping to train employees and develop leaders within the workplace. Training can be accomplished in several ways, such as through on-site training, custom seminars or online learning systems.
Claims Resolution
Workers’ compensation claims must be handled swiftly and accurately to ensure that the ill or injured employee receives their benefits promptly. PEOs can provide businesses with workers’ compensation insurance and assist in every step of the claims process. A PEO can also conduct preventative safety reviews and help injured employees return to work.
Choosing a Professional Employer Organization
When comparing PEOs, there are certain qualities that a business should look for, such as financial stability and a strong track record.
A PEO should have the resources needed to meet the unique needs of the business and its employees and should be willing to provide ongoing support and guidance. Consider asking the PEO for references from past clients in the industry to determine their professionalism and trustworthiness.
Speak with an Employee Benefits & HR Consulting Firm About A PEO
Businesses in nearly all industries can benefit from PEOs, such as health services, legal services, HVAC, wholesale, business services, engineering services, technology services, real estate, manufacturing and many more. To learn more about how New City can help your business, contact New City Insurance.