What is a PEO? PEO abbreviates Professional Employer Organization.
As your company grows, your human resource demands grow accordingly. Even small businesses are susceptible to human resource growth demands during their expansion activities.
For any company to grow seamlessly, the staff must meet the new company’s demands. It is quite a challenge for companies to break into new frontiers, especially if the companies don’t have a strong presence in the region they’re expanding into. Take, for instance, a company planning on branching abroad.
Such companies will need a PEO for their recruitment, payroll management, and other human-resource-related activities. They will also need to adapt their current employee framework to that of the region they’re expanding into.
What Is a PEO?
You can best describe a professional employment organization as a co-employment model. PEO is a type of service for businesses, both large and small, to manage employee-related matters like payrolls, pertinent taxes, and even administrative HR functions.
With all that, out of the way, you have more time to focus on the profit-generating aspects of your business’ expansion. Plenty of companies across the country have utilized PEOs to streamline company operations. Read on to find out some amazing benefits of hiring a PEO.
Benefits of Professional Employer Organizations?
Now that you know what is PEO, let’s now highlight a few benefits of PEOs especially for small companies.
PEOs are overwhelmingly beneficial for companies and should be a must for any company during the implementation of its expansion strategy. Here are the amazing benefits of PEO.
1. Employment Compliance
Employment law is constantly changing and varies from place to place. Most businesses understand how costly breaching employment laws could be. Unfortunately, ignorance is never a valid defense when you break any employment regulations.
When you break into new territory, you should be well versed with the employment laws of the region. For example, in some regions, the law terms it unlawful to inquire of any criminal backgrounds of your potential employees.
You can have the PEO team up with your current staff for maximum effect. Doing so also makes sure that the PEO’s activities are in line with your company’s work culture and policy.
2. Employee Benefits
With PEO servicing, you can give your employees benefits without the usual administrative protocols. This service means your employees can have their benefits, and you won’t have to dig deep into your pockets for these benefits.
When it comes to benefits, think of things like dental and medical coverage. Some PEOs can provide even disability coverage.
Because the PEO acts as a co-employer, it will handle all administrative tasks pertaining to these benefits. In doing so, the PEOs save you a lot of time, effort, and money on employees’ benefits.
The PEO will also provide a framework for your employees to understand their benefits better. PEOs accomplish this by establishing contact centers, pamphlets, and enrollment tools.
3. PEOs Assist with Legal Affairs
Lawsuits and liability are common with a lot of companies. Some businesses have been devastated by a single lawsuit, let alone multiple lawsuits. Lawsuits are also not so good for your company’s public image.
PEOs have considerable experience with legal matters. As such, they can be a valuable asset with your company’s run-ins with the law. They can help you make settlements less costly, if not eliminating the need for any settlement.
However, keep in mind that PEOs’ services cannot be substituted for professional legal counsel. Instead, think of PEOs as a boost for your already established legal set up. So you shouldn’t skimp out on your lawyers because you’ve hired the services of a PEO.
That said, the experience PEOs have garnered will certainly sway court rulings to your favor. They’ll also share some liability for breaching employee regulations like wrongful termination, for instance.
4. Staff Recruitment
Nowadays, employee recruitment is at the core of most successful companies. However, due diligence is required in the process to make it successful. When expanding your company to new regions, it’s not so easy to recruit the right people at the right time.
Recruitment takes a lot of time and money too. Remember, company operations don’t stall for recruitment purposes. You need to get qualified candidates fast so that your company can continue running without a hitch.
Good PEOs offer recruitment assistance for companies. The PEOs help you find eager qualified candidates for the job openings. They’ll also do a thorough job in the recruitment process.
PEOs can handle everything from job vacancy announcements to background checks. PEOs have skilled recruiters who have worked with a lot of companies.
Collectively the time and resources plugged into recruiting the right staff is considerable. Hiring the correct people is important, because the wrong people may cost your company much more.
5. Retirement Benefits
A PEO can take over all administrative retirement responsibilities from your firm. The PEO provides retirement programs to help boost employee loyalty, motivation, and retention. These programs include the famous 401(k).
Some PEOs can even sponsor 401(k) plans so your employees can push compensation for their retirement. It will be able to meet all statutory requirements and regulatory laws. When you opt for a PEO, employee retirement is something you don’t have to worry about.
6. Extra Perks
Apart from the above benefits, PEOs also have a few additional perks. These perks include things like access to banking infrastructure. Assistance with employee training and mentorship. Some PEOs also handle some form of worker’s compensation insurance.
PEOS Won’t Do Everything
As much as PEOs are resourceful, they won’t do every little single thing for the company. PEOs won’t completely take over your company but, instead, make administration easier.
Before you settle on a PEO company, remember to do sufficient research of the company in question. Not all PEOs may be the right fit for your company.
Hopefully, you now understand what is a PEO, and you’re ready to embrace PEOs for your company’s prosperity.
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