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Talent 101

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Trinity Optical

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Is HR Management even a thing anymore?


HR conceptSMB Human Resources Management – Adding Business Value

Does Human Resources Management mean a thing anymore? – or maybe it never did. For very small businesses, HR management principals, educators, and professional membership associations have stakes in continuing the belief that they are needed in organizations of every size. Some would re-title Human Resources Management functions and genuinely believe it has something to contribute of value. As HR Consultant Bernard Marr writes, “HR departments often portray themselves as a valued business partner for management and staff alike.”  Is this fiction or fact?  We say it’s a little of both.

No Value: SMB HR Management and Administrivia
For Small Business, Human Resources management is a payroll and benefits issue and many times not much more than that. Eventually, a business gets big enough to worry about compliance issues, and the management team and office manager attempt to corral the issues that result one by one.   

As a result, the reality of SMB Human Resources Management is many times reactive rather than being a creative and proactive approach to your human capital resources. Its tangible value in that case is in defensive response to negative stimuli. It does not manage people, product, or productivity and often the personnel in Human Resources, with all due respect, perform administrative, bureaucratic, and paralegal tasks. None of these tasks adds or creates value.

Adding Value: Outsourcing the HR Function
One way to add value is to simply outsource the HR administration. A Professional Employer Organization (PEO) will allow the SMB to outsource all administrative, bureaucratic, compensatory, and compliance duties. Those functions will run smoothly, efficiently, and accountably, while the business of business can be run without the ‘pull’ from HR administrative tasks.  According to Mindy Flanigan at Infiniti HR, “the PEO you are working with has a dedicated HR specialist or an HR service team member to explain in as much detail as you need, how the platform will support your business’s human resource management needs.” The PEO can also recruit, track, assess, and follow talent management with less bias and more respect for corporate operations and finance silos.

This shift of traditional in-house functions allows for the business to focus on its core competency.

Adding Value: Using HR Information: Big Data
A Staff Analytics function applies metrics to talent management. The analytics can develop profiles of performing employees, good recruits, and potential stars. It can identify talent gaps, compensation conflicts, and future needs. It would be singularly responsible for placing and developing talent where and when the business needed it. To do its job efficiently, the function should not only report to HR, but also to the shared interests of Operations and Finance. In small business, your outsourced HR service provider could help identify those key metrics and measurements which you could not get from an in-house HR team with limited resources.  

Conclusion: Think Big, Outsource Now
People are assets and value resources to the SMB, so there is a role in making sure they are happy in their work to the extent that it engages and satisfies their personal, family, and social needs. Diversity, sustainability, training, risk management, and Big Data – these are all things better handled by experienced experts with their own clearly defined roles. This frees up your management team, and quite possibly your one and only HR person to be strategic in determining those additional HR needs. This is where we fully endorse the professional employer management organization.  

Human Resources management is meant to eliminate the administrative chaos, and the sooner you outsource your employment, the better you are in handing the strategic human capital challenges.

The Hidden Costs of Poor Customer Service in the HCM World


human capital managementThere is a great debate in retail circles that the cost of great customer service outweighs the cost of doing just a marginal job in terms of gross sales and the bottom line. The retail arguments aside, I can attest that the substandard treatment of your employees by your HCM department will cost you far more in lost productivity and morale than delivering to them the best service around. Notice we did not call it the HR department - because we are talking about much more than that. Here are just a few relevant points:

Wasted Effort and Rework – Ask any location manager how much time and effort goes into resolving even the smallest payroll error. These difficulties are duplicated by your HCM department. It is far more efficient, less time-consuming and far less costly to ensure that your employees are paid accurately and on-time.

More “Touches” Per Employee – The same logic applies across the whole gamut of employee/employer interaction - whether finding new hires, delivering benefits or terminating an employee – less “touches” by the HCM staff means less cost. The only way to accomplish this goal is to deliver the best possible customer service to your employees so that they do not have to make a return trip or phone call.

Reduced Turnover – If finding and keeping the best customers is the mantra of retail, then finding and keeping the best employees should be the one of HCM. Still, many HCM departments do not see it this way. Instead, they look to impose a series of rules and regulations that not only weed out the worst but also drag along a significant number of worthwhile employees. Excellent customer service from HR will encourage the maximum number of employees to stay while eliminating only the very worst.

Your HCM Staff – No one, not even those in the seemingly secure position of dealing with internal issues, wants to fix problems on a daily basis. It is stressful – even abusive at times – and very rarely gets a “thank you” when the problem is fixed. This situation defines the whole “HCM/customer service” issue in a nutshell. HCM must provide flawless service as “fixing” a problem is not really appreciated... and if they cannot provide superlative service for the employees, the company will ultimately lose.

The Outsourced HCM Solution
If HCM is not your forte and you don't want to build the infrastructure necessary to provide superior customer service to your employees, consider the services of an outsourced human resource vendor (HRO or PEO).

HROs are specifically created to be the experts in all administrative and procedural aspects of human capital management. Not only can they ensure that your payroll is done right and on time, they can also administer your benefits as well as handle all your recruiting, hiring and termination activities.

In short, HROs are the answer to any busy executive team that wants to concentrate on the most pressing needs of a business but still understands that his most important asset is his people.

Small Business Recruiting Trends - What's Your Plan?


HR recruiting plansSocial media offer small business owners unprecedented convenience and reach. They find social technologies indispensable for building brand, networking, and marketing. Chasing all these tasks is time-intensive, can be distracting, and sometimes even seems to reduce the convenience. But, if you are not ready to follow developing social recruiting trends, you had better come up with a plan.

Itty-bitty business!

If your small business is a micro-business, say, with fewer than 25 employees, recruiting by social media may be nothing more than using word-of-mouth. This works sometimes, but it is very risky. The idea of trusting a relative for a recommendation of someone who knows someone who is looking for a job – that is just not in your best business interest.

If you run a micro-business, you would do better to trust to your network, like employers who understand your business and your needs. A few well-place phone calls may produce more than prowling social media.

Truly small business!

If you have more than 25 employees but less than 250, you are a genuine small business – as distinct from the theoretical definition put forward by the SBA. Depending on your product or service, your business segment or profession, your business may suffer more seasonal or higher turnover than some other businesses. Your business may have several locations like a chain of beauty salons or it may have mobile sites like a construction company.

Employer recruiting differs from candidate job finding, so try to differentiate them in your head and process. When recruiting, you want to use social media to put your company and needs within convenient sight of those who are looking:

1. Sell your brand: You want potential hires to recognize you and what you do. That takes more than an email or a call.

  • Script and produce a YouTube video presenting people, logo, and business personality. If you are not comfortable with executing a professional grade video, you can present a slide presentation on YouTube and SlideShare.
  • In addition to the Home, About Us, and other tabs on your website, you should have a readily accessible tab for Jobs or Employment.
  • Just as your website needs clear and complete copy under its prominent tabs, your business page for Facebook or like social venues should be consistent with your YouTube and Website visuals, including a tab for Job Opportunities.

2. Exploit your employees: The Aberdeen Group reports that Employee Referral Programs are the highest ranked source of hires with a 3.44 score out of 5. Use your business social media to encourage employees to recruit candidates. Your employees are your best reference to potential candidates.

3. Prioritize your social options: LinkedIn remains the most effective tool.

  • With 92% of employers (of all sizes) using social media to recruit, 93% of them are using LinkedIn. It has a serious about business look and feel about it without the flash and sparkle of Facebook and Twitter.
  • Facebook has potential beyond the mindless chatter that you often find there. You can use it to present a company Facebook page that uses photographs and content to present your story, culture, and job opportunities. In addition, you can encourage users to like and share your presentation.
  • Twitter’s strength lies in its brevity and immediacy. You can start conversational threads about job vacancies and the excitement you see in the opportunities.

Bigger small business!

A business with more than 250 employees is likely to rely on Human Resources to recruit and place. They can pursue the same avenues or explore media tools like The Resumator, LinkedIn Talent Pro, and JobVite. Or, you can consider the cost-effectiveness of the emerging software solutions to leverage your social media connections.

Your take-away

All these options are useful, effective, and increasingly innovative. On the other hand, they are very time intensive, adding to your HR labor burden, and increasing in cost as the venues improve. From the small employer to the larger small business, the smart option is to shift all these problems and solutions through a partnership with a proven Professional Employer Organization (PEO). A quality PEO takes pride in its successful and cost-effective recruitment. Let them worry about how to use and maximize results in social media recruiting.

How Social Media Recruitment Can Strengthen Your Company Brand
What Is Your Most Effective Source of Hire?


Break the Mold in Your Questioning to Find the Best Job Candidates


InterviewingDespite their ever-increasing responsibilities, most successful managers fall into the rut of asking the same interview questions regardless of the candidate's qualifications or of the position being filled. This can be a hazardous undertaking as most reasonably prepared interviewees are well-versed in the standard formulaic questions and have pat answers – good ones at that! – prepared for them.

With those thoughts in mind, here are some questions to help you distinguish the wheat from the chaff when interviewing potential employees. First the usual ones, then the tougher ones:

The Standards with a Twist

There is nothing wrong with these questions but they should be followed up with a second question to see if the candidate can “think on their feet” so to speak.

  • Have you ever taken a risk professionally? What was the outcome?
  • Describe your work as a team leader in a particularly difficult situation. What was your role? Did the deadline and the needs seem to be too arduous?
  • Walk me through your thought process on a complex problem that you once had to solve. A brute force approach is OK.
  • Now, tell me about a creative way that you worked around an issue.
  • Influencing your coworkers and subordinates is incredibly important. Tell me about a time when you had to win someone over to your way of thinking. How did you accomplish this?

Some Tougher but More Enlightening Ones

These questions may seem a little odd at first but they really give the interviewee a chance to be creative and to reveal quite a bit about their personality.

  • There are a lot of super hero movies out today. If you could choose a super power, what would it be and why?
  • If you prefer a more traditional approach, ask them about which historical figure would make the best dinner guest and why?
  • If all your obligations - financial or otherwise – could be met for the next six months, what would you do with your time?
  • Or, if you are less optimistic in your outlook, ask them what they would do if they only had six months left to live.
  • What would you do with a financial windfall of $20 million?

One Final Thought

Obviously, the point of these questions is not really the answer that is given but the aplomb with which it is given and the insights it gives into the interviewee. If you do decide to ask these questions, don't interrupt. Just give the person free rein for two to five minutes. It's amazing what you will learn about them.

For more on hiring the best talent, you may want to read our article, Finding Diamonds in the Rough or download our featured white paper, Hiring the Best.

Small business uncertainty following mid-term elections


describe the imageNovember’s mid-term election decided contests throughout the nation. A first glance shows results favored the Republicans who threaten to wield their mandate with a big stick. For small business interests, this means yet another “wait and see.” Small business hates uncertainty, but more may follow despite promises to reform. Here’s one take on the small business uncertainty following this year's mid terms.

  1. More of the same. The new Republican majority does not take office until 2015. At that time, members of both parties will jockey for position and committee assignments. Until there is something on paper in front of that majority, you can expect more of the same Washington paralysis. Even then, the 2016 Presidential election will determine the legislative and executive priorities. This allows time for you to plan your 2015 with some confidence that Congress will not affect your business behavior.

  2. Immigration reform. President Obama’s Executive Order on the status of illegal immigrants puts a big ball in the court of the new Congressional majority. Dealing with the Executive Order or coming up with an alternative approach will consume early Congressional energy. Because it represents a priority with 2016 implications, it will dominate the media. But, if your business complies with current employment law, yours is not threatened by any change in immigration practices.

  3. Business taxation. Unbiased analysis shows that jobs have grown in number and unemployment has declined during the Obama administration. However, there is no cause and effect here; the progress may correlate with much larger economic forces. Both Republicans and Democrats can claim support for the little legislation that favored small business, but Republicans do promote an agenda that includes changes on treatment of first year expensing depreciation, S Corporation tax deductions, and the definition of “employment status” under the Affordable Care Act. Congressional paths are in place to proceed with this agenda, but none of these changes, if enacted, will have profound impact on doing business, and most are unlikely to be effective before 2016.

  4. Healthcare Repeal. While you may be smothered in rhetoric regarding repeal of the ACA, small business is not likely to see any significant impact in the near future. For one thing, the insurance industry has stepped up and designed flexible responses to employee needs. High deductible low premium plans, for example, serve those in generally good health who have been subsidizing coverage for others in the past. The newly insured but previously uninsured will not give up their insurance easily. People apparently really like the pre-exiting conditions and plan mobility features. And, the resistant States will have to deal with inevitable court challenges. So, you see, much of the Act has already become an “entitlement.”

  5. ACA Reform. Strategies to repeal the ACA could stall reforms to the language and provisions that have proved problematic since the Act’s passage. For example, individual agents and brokers stand to work harder and lose more under the ACA. Similarly, the tax treatment of medical devices will likely change. Their lobbyists are likely to secure favorable thinking about repairing their situation. But, such adjustments are largely administrative with little impact on small business healthcare programs under the ACA.

One certainty that arises amidst the post-election uncertainty is that small business will see little pressure – positive or negative – in 2015. Newly elected Congressional members will not be positioned to speak or act with power, and senior members do not appear to share the same agenda. You should find relief in the new situation and enjoy the time to plan your own growth amid any small business uncertainty following the mid-terms.

Download our free guide detailing a three-step process for understanding and navigating Healthcare Reform: Requirements, Responses and Resources.

What’s the quid pro quo in a PEO deal?


describe the imageMuch has been said about when and why you need a Professional Employer Organization (PEO) in your corner. But, once you make the decision to act, you will confront a scenario that anticipates your start. As you close in on your agreement you will meet with your vendor to exchange points of interest. Each of you will present administrative needs and solutions to qualify for and facilitate the plug-in. Each has a quid pro quo to deliver, and the following is a PEO decision checklist.

Your job -

The vendor needs data to “underwrite” your interest. In order to protect its own integrity, the PEO does not want to take on your problems, so it will audit the data to see how well it fits their model. At a minimum, they will be asking you for the following information:

  • Name of the PEO, if any, that you currently have in place with its Federal ID number.
  • The current rate for the employer of record.
  • A copy of the most recent payroll report with employees identified as full- or part-time.
  • Current Workers’ Compensation data with Employees assigned to Class Codes along with the annual wages paid to employees in that code.
  • The Worker’s Compensation Policy Declaration Page as well as the Loss Runs and OSHA Logs for the last three years.
  • Copy of the declarations page from your General Liabilities policy and a Schedule of Benefits for your current Healthcare Plan.
  • The employee census without the names and personal identifiers of that current employer of record’s existing healthcare plan.

Vendor's job -

You should have the same concerns about the risk presented by doing business with the provider. As the professional employer organization becomes the “employer of record,” you need the assurance that it is right for you, your employees, and your compliance obligations. The PEO should provide for you the following:

  • A statement of all fees, including set-up fees.
  • A review of all Billing Rate services in detail and in print.
  • A detailed description of the transition process, schedule, and training.
  • A clear understanding of how the provider will communicate to the employer when interacting with you and your “co-employees.”
  • Description of the provider’s customer service structure.
  • Description of the payroll service in detail to confirm that it meets your business’s standards and needs in quality and performance.
  • Available group benefits plans with demonstration that they are qualified, funded, and experienced.
  • Clarify the role of Human Resources and Risk Management as accountable or advisory.
  • Provide certificates of insurance for provider’s workers’ compensation, general liability, and other pertinent protection.
  • Submit copies of all licenses and certifications, including those offered by state agencies, professional associations, and company officers.

Hopefully, you will not approach the PEO decision casually. The first vendor you meet should not be the last one you consider. The move to a professional employer organization demands a pacing on your part, a calendar that will allow you to shop carefully, assess fully, and meet frequently. As you approach your decision event with a short list of vendors, you have to assemble a package in request of service. Having done so, you will meet with the choice vendors with your PEO decision checklist, your quid for their quo exchange of packages.

View our PEO Directory for a list of qualified vendors to begin your research.

Creating and Sustaining Identity in a PEO Relationship


brandingA corporate brand is much more than its name and logo. A successful organization’s brand is a function of its employees’ identity. Either brand identity lies in employee DNA or it does not. According to Americus Reed, II of the University of Pennsylvania’s Wharton Business School, “It is the social glue that creates a community of human talent, but that also flows down to end users and/or customers.” The challenge lies is cultivating and sustaining identity in a PEO relationship.

Consideration #1: Corporate Brand
Marketing gurus would have us all believe that brand consists of the public appearance a company makes – the looks, the lingo, and the legend. There is truth in this if that message carries a record of quality product, promises delivered, and customers satisfied.

But, these are each delivery processes accomplished by people. If there is a gap between what the leadership understands by “brand” and what its employees and customers think, there is a real problem. Considering that corporate values – good or bad – will run downhill, Human Resources provides “the main channel and conduit” to align corporate and employee engagement. The need to create and sustain that connection identifies a new accountability for finding the talent and shaping the mindset in which employees “view what they do as more of a calling than a job.

Consideration #2: Employee Brand
The makers and providers often have a different take on the business brand than does the executive leadership. It was one reason Henry Ford paid employees well enough to buy a Model T. It literally put them into the brand. It raised morale by valuing employee participation, and they in turn internalized the values. So, it takes more than good communication.

If employees do not patronize the brand, they have not bought into it. Other negative signs will appear in poor product quality, untimely delivery, and increased employee turnover because these are easier ways for employees to articulate their brand identity crisis.

Consideration #3: Cloning the DNA
When HR focuses on employee advocacy or compliance burdens, it fails to link the corporate identity with the employee’s identity. Without the engaging and energizing employee loyalty, HR misses the chance to breed and replicate the brand DNA. This requires understanding, compassion, and cloning the best in business practices and performance participants.

Making it work with a PEO
A business’s relationship with a PEO can present a challenge to this branding. When employees are co-employed, there is a risk that they may not be clear who they work for, let alone what brand deserves their loyalty.

You solve the problem of creating and sustaining identity in a PEO relationship when you make certain moves:

Move #1: You must buy into a PEO in for the right reason. If the organization treats the co-employed as replacement workers or with the disinterest of temporary employees, you already have a loyalty problem. You must respect, recognize, and reward the talents and values of shared and onboarding employees without regard to their PEO employment.

Move #2: You must know and protect the corporate identity. The brand must be personally important to Human Resources leadership if it is to sell the story fully and authentically. Any pre-contract discussions, continued communication, or contract language with the PEO must make brand identity clear and its continuation certain.

Move #3: It takes frequent and deep audits to sense the sensibilities of employees. You must communicate constructive and supportive messages linked to brand. And, you must collaborate with the PEO liaison in recruiting, training, and developing co-employees to the brand DNA.

A PEO provides the business with a mechanism to achieve its goals. It is profoundly in the interest of the PEO to help the business do so. However, it needs an active internal partner to help it see the way and to warn it when things go awry. The key to creating and sustaining identity in a PEO relationship lies not in wishing Human Resources away, but in clearly communicating the brand’s message and incorporating that into the employees’ identity.

PEO - The Gold Standard


PEO gold standardProfessional Employer Organizations (PEOs) exist to provide your small business with integrated services that effectively manage your critical human resource responsibilities and employer risks. This promise allows you to focus on growth and profitability.

Regulation often follows success.

As PEOs grow in number and size, it may be difficult for some to identify the best in quality performance, reliability, and integrity. With the growth in PEOs expected to escalate through 2020, there has been a consequent increase in state regulatory interest and regulation. Reputable PEOs are comfortable with issues of credibility, recognizing that regulation often follows success. In addition, the best PEO is the one that is open, transparent and willing to answer the hard questions about their business, their service and their pricing.

With so many workers in all 50 states now co-employed by PEOs, the need for credible self-regulation attracts and assures new customers. For someone reviewing and looking at what the PEO can offer their business, rest assured there are plenty of terrific, trusted options. A few years ago The CPA Journal reported that, “Professional employer organizations have developed over the years toward higher standards, more complete services, and electronic solutions, For companies, using or considering a PEO, today’s PEOs represent less risk and more resourcefulness than before.” That was several years ago and the industry, the regulations, and the risk, have allowed the PEO to thrive today because they are providing tremendous benefits to their small business 'partners'.

The National Association of Professional Employer Organization (NAPEO), Employer Services Assurance Corporation (ESAC), and dare we say,, have grown into the most influential voices in the industry.

NAPEO is the largest trade association for PEOs. It supports PEOs, provides networking and referrals, education programs, public relations and marketing support.
ESAC is a non-profit, backed by $10 million in surety bonds, and works under a Board of Directors, including CPAs and PEO industry attorneys. is a free online service that allows small businesses to find, compare and research the PEOs that match their business needs.

Any small business wants the assurance that it is working with a reliable, credible, and secure organization. They would expect that of any vendor. But, voices such as those listed above take various parts in auditing, certifying, and evaluating their PEO members. They sponsor education, certify advancement, and/or publish everything you need to know about the PEO industry.

Honestly if you have less than 50 employees, and often times many more - you must consider a PEO. They don't just do payroll, they reduce your risk and help you provide the best offering for your employees thus allowing you to compete with the 'big' boys.

Rethinking the Performance Appraisal Metric

You are awesomeMany managers and business owners give short shrift to the daily performance counseling aspects of their job and simply rely on the annual performance evaluation to let their employees know how they are doing. While this strategy may save some time in the short run, it does a serious disservice to the company and to the employees alike. Here are just some of the misconceptions prevalent in the business community about annual reviews:

They Avoid Favoritism – When yearly evaluations are the only way to gain recognition and, more importantly, a pay raise, employees will react accordingly and gear their behavior to meeting these somewhat arbitrary goals. No matter how good your HCM department thinks it has developed the annual goals, employees will game the system and the less than worthy will be rewarded. In short, it creates an environment where favoritism, nepotism and sheer incompetence will reign supreme. Think twice about using this system.

They Are Dilemma Free – Most annual evaluations are structured with a budget. Thus, no matter the actual efforts of the employees, only a certain number of people can be given raises. It is simply foolish to believe that your employees don't recognize this fact. While the ones who win the :lottery” as it were and get raises are happy, the rest of the staff will be demoralized.

Also, don't kid yourself, the lucky ones who get raises this year will realize that they will probably not fare any better next year than this year's losers. Lastly – bear in mind that in no way, shape or form, is this process considered fair or objective by the employees.

They Promote a Leadership Environment – True leadership is not developed by ensuring that one's subordinates meet some predetermined goal of on-time arrivals, customers served in an hour, or any other definitive metric. Instead, leadership is inspired by on-the-spot decisions made by a manager when a complicated or unusual situation presents itself. In addition, a true leader will put himself in “harm's way” as it were if a customer, another employee or even a superior should intrude. There is simply no way to codify and reward that type of behavior in an annual review. It can only be dealt with in an ongoing manner.

They Reduce Expenses – One of the most objectionable excuses used to defend annual performance appraisals is that they cost less to administer. Their expense does fit into convenient increments that can be expensed proportionally across your various locations or departments. Still... at what cost? Trusting your location or office managers to promote and incent their immediate subordinates – within limits, of course – is, by far, the best way to go. Naturally, you will have to keep an eye on the process but, that's why they call it a job, after all. Plus, it will help you identify the best talent in your organization. So, how much will that save you?

They Insure You from Liability – It's a long held and treasured belief that an HR administered annual review can save a company from any charges of discrimination when it comes to raises and promotions. Nothing can be further from the truth. In fact, company prescribed assessments are far more susceptible to legal assaults on their fairness than those administered by individual managers who truly know their subordinates. Liability is born of inconsistency and intractability. It is necessary to develop a framework but do not mistake “hard and fast” rules for leadership. It is a mistake that you will regret in the workplace and in the courtroom.

The Right Appraisal Matrix
The bottom line is to recognize talent, dedication and loyalty in your employees. It is not something that lends itself well to a top-down approach. Consider this fact when designing your next performance appraisal strategy. Perhaps, it can be accomplished in a much more humane, intimate and less threatening environment.

You may also enjoy, A Beginners Guide to Sabotaging Superior Employee Performance.

5 Dynamic Ways your Business Benefits from Partnering with a PEO


businessmanA professional employer organization (PEO) offers your business a brighter future. The co-employment relationship promises small and medium sized businesses a new employee infrastructure, one that benefits from economies of scale in purchasing group insurance benefits and workers compensation insurance. There are at least five dynamic business benefits from partnering with a PEO.

1.    Core Business: A PEO will take over and manage burdensome tasks allowing you to drive the business your way:

  • Wage and hour administration
  • Payroll processing and paycheck distribution
  • Quarterly tax filings
  • Payrolls deductions and garnishments
  • W-2 filings

2.    Human Resources: A PEO has the expertise and experience to administer Human Resources functions and monitor compliance with applicable laws and regulations.
  • Process, track, and archive forms and files
  • Meet and communicate legal and regulatory requirements
  • Oversee compensation structure
  • Hire, fire, and provide counseling

3.    Increase Profits: A business increases its profit when it lowers its costs. According to a report developed for the SBA, “Small businesses . . . bear the largest burden of federal regulations. [They] face an annual regulatory cost of $10,585 per employee, which is 36 percent higher than the regulatory cost facing large firms.” 
  • Economies of scale access competitively priced insurance products and services
  • Co-employment reduces Human Resources staffing
  • PEOs effectively leverage an array of business partnerships
  • Some PEOs are equipped to assume some or all training responsibilities

4.    Employer of Record: As the PEO becomes the employer-of-record for tax purposes, it also makes your business an employer of choice. Having used its economies of scale and business partnerships to secure cost-effective insurance benefits, the co-employment relationship secures employee retention. Employees can vote with their feet, and they will not walk away from employers offering a buffet of insurance benefits, retirement plans, flexible spending accounts, and more.

5.    Proprietary Security: A PEO provides the business owner with a level of comfort in personnel management, legal compliance, risk management, safety training, claims processing, and more. Indirect costs of uncertain HR management, poor risk management, inadequate training and claims processing present themselves as litigation. Fraudulent claims, frequent claims, and uncontested unemployment claims all present financial risk. And, some PEOs provide additional protection with an employment practices liability insurance policy to cover workplace torts.

Security takes many shapes. You find it in language, policy, and practice. But, there are cost savings when you can secure your business on several levels at one time in a co-employment relationship with a professional employer organization. A PEO is a true partner, sharing and supporting your security concerns. Peace of mind is a valuable benefit of any relationship. But, these five dynamic ways your business benefits from a PEO reinforce that primary value so that you can run and grow your enterprise the way you intended.

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