Does A Peo Make Sense For Your Business?

A Professional Employer Organization (PEO) specializes in handling all the responsibilities that come with employing people. It can be a great way to outsource the administration of payroll, human resources, employee benefits, regulatory compliance and workers compensation. By using PEO services for these kinds of administrative tasks, you actually save money and free up time to work on business-critical tasks.

But how do you know if a PEO makes sense for your business?

Most experts agree that if you employ fewer than 200 people, youre an ideal candidate for PEO services. Most companies that use a PEO employ between 10 and 200 people. According to the National Association of Professional Employer Organizations (NAPEO), about 80,000 U.S. companies currently use PEOs, and the numbers are growing almost 30 percent each year.

A PEO becomes the legal employer of your employees, taking on not only the administration of your business but also some of the associated legal liabilities. Simply put, the PEO co-employs your staff, but you maintain control of your employees and are still responsible to hire, direct and guide employees.

If youre a small business, you know how expensive it can be to offer employees benefits. PEO services are ideal for small businesses because they enable them to offer benefits like health and life insurance, dental and vision care, 401(k) retirement plans, counseling and educational benefits. Most small businesses cannot afford or manage these kinds of benefits on their own. Because a PEO works with many companies, it can pool them together to get lower rates on benefits.

Professional Employer Organizations provide a whole host of benefits including better control over costs, reduced employee turnover and access to better benefits. But one of the biggest benefits of using a PEO is the time it saves you each and every week. Consider how much time you spend now on record keeping, regulatory compliance, workers comp issues, benefits issues, budgeting, taxes, payroll and other administrative tasks. If youre like many small businesses, these tasks can take upwards of 20 hours every week. Wouldnt that time be better spent marketing and growing your business?