Saving money is often a top priority for many businesses, and working with a PEO can help your company do just that. A PEO or Professional Employer Organization can not only help your business save on providing employees with benefits.
But also manage certain parts of your human resources and payroll. If this is your first time hearing about PEOs, you’re not alone. Despite the excellent benefits that they can provide to small-to-medium enterprises.
The term is not commonplace in the business world. A PEO can be incredibly helpful to your business, whether you simply want to streamline HR, payroll, and employee benefits or expand your company into an international market.
What Exactly is a PEO?
PEO stands for Professional Employer Organization. These companies work with small to medium businesses to help them with a range of tasks such as managing payroll and taxes, access to employee benefits, certain human resources tasks.
And other employer-related admin functions that are crucial to successfully running a business. When you partner with a PEO, they can take over a lot of the mundane tasks that often arise from growing your business team.
Allowing you to free up time to focus on what matters most; growing your business, and ensuring that it is a success. Here are just a few things that PEOs are able to help your business with:
Employee Benefits
A good PEO can make it easier and cheaper for your business to access and provide your employees with a wide range of benefits, such as medical, dental, and vision coverage for your team.
PEOs can help your business attract top talent by making it easier for you to obtain a better range of employee benefits to offer your team.
By aggregating the employees of several small businesses together in order to take advantage of the buying power that is typically reserved for bigger companies. A PEO can also help with various types of benefits administration such as onboarding, claims, and more.
Additional Perks
Along with the standard employee benefits that most people have come to expect from their employer today, a PEO can also help you with offering access to a range of additional perks for your employees.
For example, this could include access to wellness perks like cheaper fitness center memberships, or financial benefits like access to 401(k), and many more.
You will find that different PEOs can help you provide a wide range of different benefits, but the one thing that they have in common is that they tend to all have the end goal of helping your business create a happy, healthy and satisfied team that loves where they work.
Compliance Support
A PEO can also help ensure that your business is compliant as an employer in a range of different ways, particularly when it comes to payroll and employee tax. A PEO can help you in this aspect in your domestic location.
But can also be extremely useful if you decide to expand your business into an overseas market. New Horizons Global Partners will help you navigate overseas tax and employment laws.
Ensuring that your company is fully compliant in every aspect in order to facilitate a smooth transition into the new market. You can read more about PEO and the services that New Horizons offer here.
Payroll
Managing payroll can get tricky as your company grows, particularly if you are not yet big enough to have hired a full in-house HR team, but the teams in other areas of your business are expanding.
Doing everything yourself can get tricky and there’s only so much your accountant is paid to do on your behalf. Working with a PEO can help you streamline every aspect of payroll both in your home country and among international employees in companies that have expanded overseas.
It is a particularly useful service for companies expanding overseas since an experienced global PEO will have experience of local time zones, banking practices, currency exchanges, and other common issues that tend to crop up when employing staff overseas.
A PEO can streamline your payroll in any location with automated deposits, one-off payments, and handling all those mundane admin tasks that are essential to payroll, which can quickly cut into your valuable time.
How PEOs Work
A PEO is able to take on such responsibilities as the above for you due to a practice known as co-employment. According to the National Association of PEOs, this is defined as a contractual sharing of certain employer responsibilities between the PEO and their client or partner.
This contract allows the PEO as an employer of record to handle payroll administration duties, tax filing, HR support, access to benefits, and more, while your company is able to retain responsibility for the day-to-day operations and general management of employees.
What are the Benefits for My Business?
A PEO can benefit any business in a range of different ways. Some key advantages that working with a PEO can bring include:
Cost Savings
Working with a PEO can help your business save money in a range of different ways, particularly when it comes to hiring employees and providing employee benefits. In terms of benefits, your employees will be grouped together with the other employees of companies.
That your PEO works with, in order to provide better access to benefits such as health coverage that you would expect from a much bigger company.
And, the fact that a PEO will be able to manage a lot of your employment paperwork and admin for you means that you no longer face the need to hire employees of your own to handle these tasks in-house.
Risk Protection
Over 30% of small businesses face fines each year for making payroll mistakes, many of which are easily avoided. The reality for many small business owners is that compliance can be complicated, and it can be even more tricky to navigate if you want to expand your business into an overseas market.
There’s a lot of paperwork to fill out and file and various insurances that you will need to secure in order to ensure that you comply with employment laws and regulations around the world, and while it is possible to do this on your own, becoming an expert in compliance probably wasn’t your goal when you started your own business.
Free Up Time
Finally, any small business owner will know that running their own company can often feel like they are in a constant race against the clock. There’s always more that needs to be done.
And it can be easy to feel overwhelmed and like there are simply not enough hours in the day to get everything done. Working with a PEO means that you can hand it over.
The responsibility of those essential yet mundane tasks that every business must take on as they grow and expand their team, freeing up your time to focus on what matters most – growing your business.
Whether you simply want to free up your time to focus on expanding your business or are planning a huge expansion overseas, working with a PEO can be a cost-effective, beneficial way of getting the support your small to medium business needs.
