If you are a business owner, you know what types of challenges to expect – both general obstacles and hurdles that are specific to your industry. You want to constantly ensure that you are turning a profit while also verifying that your administrative and human resources processes are carried out efficiently. If you have found yourself struggling to balance these two objectives, you may be considering assistance from a Professional Employer Organization (PEO).
Why Should I Work With A PEO?
A PEO and another company enter into a relationship known as “co-employment.” A PEO can help your company streamline its HR responsibilities and other processes, which means you can allocate more time and resources to running your business. Although small and mid-sized businesses can particularly benefit from hiring a PEO, larger companies may also gain an advantage from acquiring this type of assistance.
The PEO industry has grown substantially in recent years. According to the National Association of PEOs (NAPEO), the number of worksite employees employed in this industry grew at a compound annual growth rate (CAGR) of 8.3% from 2008 to 2017. Although there are many benefits to using a PEO, here are four notable advantages of enlisting help from such an organization: assistance with benefits management, reductions in payroll costs, access to retirement plans, and ensuring HR compliance.
Assistance With Benefits Administration
The first task a PEO can assist you with is the process of managing employee benefits such as health and dental insurance, disability insurance, wellness plans, and unpaid family leave. More precisely, a PEO can help you offer your employees comprehensive and cost-effective benefits without having to carry any regulatory and administrative burdens. A PEO is able to get businesses a stronger benefits option at an overall lower price. This is because PEOs can take advantage of their larger pool of employees and negotiation power with the carriers through providing legal notices, among other administrative tasks. . A PEO can also answer any questions your employees may have regarding their benefit plans.
Decrease Payroll Costs
In addition to assisting with benefits administration, a PEO can also help reduce your payroll-processing and accounting-related costs. A PEO can automate the payroll process and handle your employment forms (e.g. W-2s) and with holdings. It can also help release quarterly and annual payroll reports. A PEO can be especially useful in this respect if your company employs a large number of workers. It is highly recommended that you hire a PEO that charges a single fee for all of its payroll-related services.
Provide Access To Retirement Plans
A PEO can also offer access to retirement savings plans, including 401(k) programs. This type of provision may potentially help increase your employee retention rate. According to a 2018 survey by risk management and advisory firm Willis Towers Watson, 78% of employees stated they are more likely to remain with a company because of their benefits program. A PEO can act as a plan sponsor and handle all 401(k) related administrative duties and requirements for compliance with federal regulations, as well as offer informational materials to your employees so that they are well-educated on the subject of retirement savings.
Ensure HR Compliance
The final major advantage of using a PEO is that it helps companies stay HR-compliant. Employment laws are constantly changing; therefore, it’s important to always remain informed about HR regulations. For example: over the last three years, states such as California, Connecticut, and Massachusetts have introduced bans on salary history requests for private employers. Failure to comply with these laws may often result in fines and other penalties.
Other advantages of working with a PEO include assistance with workers’ compensation administration, employment-related lawsuits (e.g. wrongful termination) and drug testing programs.
Speak To A PEO Consultant
Reach out to the professionals at New City Insurance in San Diego for more information on PEOs and their benefits. Since our founding in 2008, we have been dedicated to helping our clients obtain high-quality insurance solutions while reshaping the industry as we know it. Our employees are thoroughly trained and highly knowledgeable about all of our proprietary benefits and employee management software.
If you offer employee benefits, hiring a PEO can help you administer them while also assisting you with HR-related responsibilities and other essential administrative tasks. A PEO may also help you manage 401(k) and retirement packages and handle costly employment-related lawsuits, including wrongful termination. Finally, a PEO will help your company remain compliant with both federal and state employment regulations.
Whether your company is small, mid-sized or large, the team at New City is dedicated to simplifying your HR and administrative processes so that you can devote more time to running your business. Call New City Insurance today at (888) 210-2759 or contact us online to request a consultation.