Let’s begin by answering a few questions that are typically top-of-mind when a company begins thinking about on-boarding a Professional Employer Organization (PEO).
What is a PEO?
According to the National Association of Professional Employer Organizations (NAPEO), a professional employer organization (PEO) provides comprehensive HR solutions for small and mid-size businesses (SMBs). Payroll, benefits, HR, tax administration, and regulatory compliance assistance are some of the many services PEOs provide to growing businesses across the country.
What is a PEO Broker?
Simply put, a PEO broker is a company that specializes in understanding the differences between the various types of PEOs, as well as the needs of the SMB clients they serve. They represent a variety of PEOs, and collect a finder’s fee when they match the right PEO with one of their clients.
Why are PEO Brokers Needed?
With more than 900 PEOs in the U.S. alone, the task of finding a PEO that meets the specific needs of a company, has the right experience, and can provide services at the right price can be overwhelming, not to mention time-consuming.
Finding the right PEO is a complex process, and comparing the offerings of PEOs that make your shortlist requires the right comparison tools. In addition, you need to have a thorough understanding of the pros and cons of each potential PEO.
This is where a PEO broker will simplify the process and enable you to get back to doing what you do best – growing the business. Let’s take a closer look at the benefits the right PEO can provide to you, your employees and your bottom line.
Get the Right PEO the First Time & Start Reaping the Benefits Faster
Because a PEO broker has a vested interest in a positive outcome, they are dedicated to pairing SMBs, like yours, with a PEO that’s a good fit on services, value, and price. With the help of a PEO broker, you increase your chances of hiring the right PEO the very first time, putting you on the fast track to be able to offer better benefits, work smarter and grow your business faster.
Offer Better Benefits
Because PEO’s use economies of scale, they’re able to offer you premium benefits packages at a fraction of the cost. These benefits, depending on your specific needs, could include health plans, dental, vision, retirement, life insurance, short-term and long-term disability insurance, flexible spending accounts, AD&D, educational benefits, and more.
Now more than ever employees seek companies that offer competitive benefits. In fact, over 15% of employees that are actively looking for new positions rate benefits as a driving factor when making a job change. And because PEOs pool the employees from many businesses, you can save up to 40% on your benefits package. By offering top-notch benefits you’ll be in a better position to attract desired talent, which ultimately will have a positive effect on your business. A winning situation for you and your employees.
A PEO is a co-employer in the best possible way. They share the liability for employment management, income tax reporting, payroll, regulatory compliance, etc. In essence, they manage your backroom HR functions and not your everyday business. As the business owner, you remain in complete control of managing the company and its employees.
To illustrate co-employment, think of it as a way to gain the extra headcount you need at a lower cost than if you employed HR, payroll, etc. employees. In this arrangement, they handle the burdensome administrative tasks. This provides you with the freedom to actually run your business, instead of being buried under time-consuming paperwork
Did you know that, on average, companies that partner with a PEO grow up to 9% faster than those that don’t? In addition, also according to NAPEO, they have between a 10% – 14% lower employee turnover rate and are 50% less likely to go out of business. The reason for these impressive figures is that when you partner with a PEO, you get back the gift of time to focus on what you know best – your business.
Even with these benefits, PEOs are not right for every company. Learn everything you need to know about the pros and cons of hiring a Professional Employer Organization (PEO) to determine if it’s the right choice for your organization.