What We Do

Benefits of using a PEO?

Business owners have a significant number of things to worry about every day as they fight to grow their business. If they can shift some of the day to day management around administration and compliance issues in their business to a group of skilled professionals, it will allow them to focus more on growing their business and beating their competition.

Our experience has identified several major reasons that businesses are looking for PEO services:

  1. Workers Compensation concerns – non-renewals, cancellations, consent rated or mod increases may give a business owner a reason to look for a PEO to partner with for Workers Compensation.
  2. Health Insurance – Increasing health insurance rates have driven business owners to shop around for more cost-effective coverage. We are currently seeing a strong demand for PPACA solutions through PEOs.
  3. Business Growth – Companies that are expanding rapidly need scalability to handle the growth and a PEO can ramp up quickly.
  4. Business Contraction – Businesses that are trying to minimize costs and reduce overhead look to outsource certain functions to and reduce the full-time employees that are held on their payroll.
  5. PEO Dissatisfaction – Some companies are not satisfied with their current PEO and are looking for a better fit with another PEO.
  6. Frustration over government compliance– Businesses get frustrated with the complexity of laws and regulations and would like a skilled professional to help avoid potential legal landmines. See the growth of regulations below.

What makes a PEO different from other outsourcing organizations?

PEOs derive significant cost savings and efficiencies with the co-employment relationship. PEOs provide the payroll to all of its client’s employees under a single Employer ID number (EIN) which provides the following benefits:

 

  1. PEOs combine all work site employees for payroll, tax payments and filings. This creates operating efficiencies and reduces the number of tax returns for the client firms and the PEO.
  2. PEOs combines the purchasing power of all of their clients to purchase a single master W/C insurance policy covering all of its clients employees. Significant cost savings are then passed on to the client firms. This also eliminates W/C audits and deposits for the client firms.
  3. PEOs are able to purchasing master insurance policies for health insurance and other employee benefits which can provide better insurance rates and more options for its clients and their employees.
  4. PEOs also combine the work site employees for state unemployment tax purposes. This eliminates separate state unemployment tax returns. It can also result in a lower tax rate for the client firm.
  5. PEOs are better able to integrate the services and products they provide to their clients. The client firm could have as many as 12 separate vendors providing the services a PEO provides.

All PEOs provide payroll and W/C. PEOs can also provide health insurance and various employee benefit plans, human resource services and human resources information systems. There are over 700 PEO and each one provides different types of service offerings.

Our experience has also identified several reported benefits from clients who are using a PEO:

  1. Reduced cost of services for HR, payroll, WC and benefits improves the company financials.
  2. Increased benefits for their employees may lead to better retention.
  3. Access to specialists helps reduce time and risk associated with HR issues. Increased reporting functions help analyze business efficiency.
  4. Reduced risk of non-compliance because of improved systems and procedures.
  5. Single source management of HR, payroll, benefits and WC reduces relationship management for the business owner and increases efficiency.
  6. Increased infrastructure to expand quickly.

A recent NAPEO study also confirmed several strong benefits for businesses that engage a PEO for services.

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