Are you a small business paying through your teeth for employee benefits? Do you want to reduce the costs?
One of the biggest challenges is the high cost of workers’ compensation insurance. This coverage can be particularly expensive for small businesses, making it difficult for them to compete with larger companies.
Fortunately, there is a way for small businesses to reduce their workers’ compensation costs and streamline their administrative tasks: a professional employer organization (PEO).
In this brief overview, we’ll explain what a PEO is, how it works, and why it may be a good choice for your business. Let’s begin.
What Is a PEO?
A professional employer organization is also known as an employer organization. It is a company that partners with small and medium-sized businesses to provide HR outsourcing services. These services may include:
- Payroll administration
- Employee benefits management
- Regulatory compliance
- Workers’ compensation insurance.
Essentially, a PEO becomes the employer of record for your employees. This means they handle the administrative tasks and legal responsibilities associated with being an employer.
How Does a PEO Work?
When you partner with a PEO, you enter into a co-employment relationship. This means that you and the PEO share responsibility for certain employment-related tasks.
You retain control over your day-to-day operations and your employees’ job duties. The PEO takes care of the administrative tasks that come with being an employer.
Such tasks can include:
- Processing payroll
- Managing benefits enrollment
- Handling workers’ compensation claims
They may also ensure compliance with employment laws and regulations.
Why Might a PEO Be a Good Option for Your Business?
There are a few key benefits to partnering with a professional employer organization. First and foremost, a PEO can help you save money.
The idea is to pool your employees with those of other businesses that partner with the PEO. By doing so, you may be able to get better rates on workers’ compensation insurance and employee benefits.
Furthermore, by outsourcing your HR tasks to a PEO, you can free up your time and resources to focus on growing your business. Plus, partnering with a PEO can help you ensure compliance with employment laws and regulations.
This can be especially important for small businesses that may not have an in-house HR team. You can read more about this topic to get specific insights for your team.
Consider Using a Professional Employer Organization
A professional employer organization can be a great option for small and medium-sized businesses. They can help you provide your employees with competitive benefits packages without breaking the bank.
By partnering with a PEO, you can outsource your HR tasks and ensure compliance with employment laws and regulations. And you’ll be able to free up time and resources to focus on growing your business.