PEO stands for Professional Employer Organization. If you are considering outsourcing HR duties to a PEO, this guide will help you decide if it is a good fit for your organization, regardless of its size.
Deciding on Your Business Model
The decision as to whether PEO suits your business is an important one that has many considerations. While it may seem overly complex, you can take each part one at a time. Below are the specific areas to consider when deciding if PEOs are best to handle your HR needs.
Benefits Your Vision for Your Employees
What benefits packages do you want to give your workers? Partnering with trustworthy PEO’s means you can offer robust packages because they often employ thousands of employees.
Thus, your small or medium-sized business can provide better benefits than you might otherwise be able to secure for your organization. Doing so can help you secure the best talent who could be tempted by bigger benefits packages at larger hiring organizations.
How Many Workers Do You Have?
Speaking of employees, another crucial consideration for whether to team up with PEOs is the size of your staff. While you might assume that a PEO is only for large businesses, that is a myth.
Small businesses can benefit from competitive healthcare packages for their employees, as well as respond to questions about those packages. Handing that responsibility to a reputable PEO opens time in the schedules of in-house HR managers for other tasks.
PEO and Payroll Taxes
If payroll is a headache in your business, then contracting the PEO to file your employment taxes can make sense. The PEO can report and remit these taxes on your behalf.
This decision can ease both your level of stress and your workload considerably, especially if the tax regulations where your business is located are not straightforward. You might also not want to oversee the claims process any longer.
For Business Growth
Your HR department may already be stretched thin, which isn’t helping you with business growth. By assigning responsibility for payroll, benefits, healthcare, and more to a PEO, your business has more time and opportunity to focus on other essential tasks.
Plus, you’ll develop heightened focus on the assigned duties by the PEO who specializes in these activities. Ensuring every important business function gets the deserved time spent on it will help drive your organization forward.
Conclusions on PEO Services
There is a lot to consider when deciding whether to co-employ a Professional Employer Organization. Deciding if it is the right model for your business involves considering each of the areas listed above, including the number of people you employ, taxation burdens, and benefit plans.
If you are still unsure as to whether a PEO is right for your business, ask yourself some final questions.
- Do you desire better benefits packages for your employees than you’re currently able to offer?
- Do you plan to experience growth in the future?
If the answers are “yes,” then it likely is in your best interests to utilize the PEO option.