A Professional Employment Organization (PEO) helps small or medium-sized businesses with managing payroll-related taxes, employee-related administration tasks, and other human resource duties that are needed to manage and grow a successful business. A PEO company works with companies by entering a co-employment agreement, which shares liabilities with the two parties. A PEO company would take over the responsibilities of human resources, administration, payroll processing, and benefits.
Managing employee-related issues can take up a lot of time for business owners, especially when you could be using your time more productively for growing your business success. A PEO service can seriously help small or medium-sized businesses by streamlining the human resource administration of the company.
Here are other examples of things that a PEO company can help with:
- Payroll – A PEO company can help with automatic deposits, one off-payments, and more. PEOs help administer payments to full-time, part-time (salaried and hourly), and vendors and contractors.
- Benefits – A PEO company can help with different types of benefits administration, for example, onboarding benefits, and benefit-related paperwork. PEOs can help your business access medical, vision coverage, and dental for your employees at an affordable rate.
- Compliance Support – A PEO company will support employer-related compliance needs for payroll taxes, reporting forms, and employee tax forms. The PEO company offers compliance support for business, including new hire reporting, workers’ compensation, employee liability insurance, and unemployment insurance filings.
- Additional Perks – A PEO company can provide extra perks to your employees, which can include access to 401 (K), and perks like discounted gym memberships. Another perk is access to commuter benefits that lets employees use pre-tax dollars for transportation costs.
How A PEO Company Can Help A Business
A PEO company can be a good fit for your business and offers advantages such as cost savings, risk management, and time to you and your employees.
- Employee Benefits – A PEO company offers cost savings on employee benefits because all your employees are put together with the rest of the PEO company’s employees to make a larger group. With the larger group, a PEO company can provide employees access to rates on health coverage.
- Recruiting – Businesses can save the costs of hiring through a PEO company. PEOs will help in managing employment-related paperwork for your business, as well as providing support for HR, such as recruiting.
- Protect Against Risk – many small businesses find themselves getting fined for making mistakes on payroll every year, and these mistakes can be costly. PEOs are experts on employment-related compliances and know the paperwork that needs to be filed for taxes and can sometimes file your paperwork for you.
- Get Time Back – Any business owner knows that running a business takes up a lot of time. A PEO company helps out with the employment-related administrative tasks, which frees up more hours in the workday to focus on building your business.
Who Can Use A PEOs Help?
PEO companies are beneficial for small or medium-sized businesses in any industry, such as technology, finance, property management, health services, law firms, accounting, real estate, plumbing, HVAC, construction, and more. PEO companies can help businesses with 5 to 10 employees, and growing companies with 100 – 200 employees.
Steps for Hiring A PEO
Similar to hiring any service, you need to research PEO companies to see the services they offer and what companies would be most beneficial to your business needs. Below are the steps required to hire a professional employment organization to help your business.
- Set-up Meeting with PEO companies – Research PEO services around your area to get an idea of what company will be the right fit for your business. When you have decided on the PEO service you want to work with, it is time to set-up a meeting. A meeting gives you the opportunity for a more detailed conversation on what services you are looking for, and you can discuss pricing and agreements.
- Hire a PEO – When you hire a PEO, their services will begin at the start of your payroll period. During this time, multiple steps are being finalized, like collecting and verifying 1-9 forms for employees, selection of benefits, and onboarding and enrollment meetings.
- Set-up Enrollment – As soon as the initial enrollment meeting is finished, the PEO company will begin immediately registering your employees.
Timeline For Working With The PEO Company
When it comes to the timeline for working with a PEO company, it can expect the setup process to take 30 days from the beginning to the end.
- Step One – is research by getting quotes from different PEO companies. Researching and quotes should take one day.
- Step Two – is scheduling reviews of the PEOs companies quotes, and this step can take six to ten days.
- Step Three – is meeting with your chosen PEO company. Meetings with the PEO company can take six to ten days.
- Step Four – is reviewing your contract agreement with the professional employment organization. Reviewing the agreement can take 10 to 15 days.
- Step Five – is implementing the PEO service into your business. Applying the PEO company can take 15 to 30 days.
Finding a PEO company for your small or medium-sized business can help with building the success of your business. Working with a PEO company can help reduce business’s risk of labor costs, and benefits for employees. Small businesses benefit significantly from PEOs and can receive the perks of more giant corporations.
Cost Of PEO Company
PEO company’s do charge for handling these services. Some companies charge per employee, while others use a percentage of total gross payroll. The amount you pay is dependent on the number of employees you have on your team.
A PEO company will help your small business by performing specific business tasks and creating a better work environment. Clients of PEO companies are mostly small businesses that have 19 employees, but no less than ten. If you are a business owner struggling with the human resource and administrative aspect of your business, then going into a contract with a PEO company might be an option for you to consider.
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