PEO Consultants Blog

The Advantages of Co-Employment Partnerships

One of the most valuable assets any business has is their workforce.

From hiring and trading to compensation, taxes, and benefits, on average, the cost of an employee can be 2.7 times their salary. As with any investment this valuable, it is imperative to protect your assets.

Small- and medium-sized businesses often struggle to compete for top-of-the-line employees with larger businesses that are able to offer higher pay and better benefits.These larger companies have more resources to handle personnel issues like insurance, taxes, payroll and compliance. They’re also able to invest in employee relations and human resource policy development.

All these investments in their workforce add up to cost savings for larger companies and give them more time to focus on core business issues and growth strategies.

If you’re struggling to achieve such employee-related business functions, a partnership with a Professional Employer Organization (PEO) is an option that will benefit your business. As your partner, the PEO handles HR functions, leaving you to devote your energy to building your business.

According to a recent study by noted economists Laurie Bassi and Dan McMurrer, small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percentlower employee turnover and are 50 percentless likely to go out of business.

Here are the ways a PEO partnership benefits small businesses:

Improve HR practices

An experienced PEO company gives professional HR guidance, trains employees, writes and helps implement employee handbooks and offers safety and risk management services. The PEO will help onboard high-quality employees while increasing employee communications.

Expand employee benefits

By pooling many businesses’ employees, PEO’s provide cost-effective insurance options that compete with Fortune 500 companies. When employees are provided with top-notch health care benefits, job satisfaction and productivity increase.

As a co-employer, a PEO also can expand benefits to include 401(k) options, life insurance, disability insurance and employee assistance programs.

Manage personnel processes

Your PEO partner becomes the employer of record for tax and insurance purposes while you retain control of business operations and worksite employees. The PEO takes care of all payroll, unemployment claims and workers’ compensation claims.

The co-employment relationship with a PEO benefits your business and your employees by improving HR practices, cultivating employee engagement (read: increase productivity) and helping ensure compliance with labor laws.

The bottom line is – your employees will be happier and stay longer while you devote your time to business growth.

Ready to take your business to the next level as a premier employer? PEO Consultants will help you navigate the PEO marketplace to find the best fit for your business goals and employees. Visit us online or call 888-623-3240.


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