PEOs provide several beneficial resources for small businesses. Since they focus on HR tasks and administration, you are left with more time to focus on your business. On top of that, PEOs can offer better benefits to your employees than you might be able to obtain on your own. This can help you attract and retain top talent. Many employer organizations use mobile applications and online portals for small businesses and employees to easily access important information, like payroll, benefits, and training courses.
Although not every business will need every PEO feature available, here are some of the top PEO features that could help your business.
One advantage of partnering with a PEO is having a professional organization take care of all your human resource services. PEOs can create your employee handbooks and policies, onboard new hires, cover HR administrative tasks, offer unemployment assistance, and help you with compliance reporting and employee termination. They often have online reporting tools, employee self-service and advanced HR technology.
Since PEOs co-employ multiple businesses’ employees, they can offer better employee benefits than you might otherwise be able to offer. PEOs typically offer insurance plans like medical (such as PPO, POS, EPO, HNO and ACO plans), dental, vision, life, and long- and short-term disability insurance. Some offer additional plans like flexible spending accounts, health savings accounts and health reimbursement arrangements.
Employees often receive retirement plans, such as 401(k) and Roth IRA plans, as well as additional benefits like commuter and parking discounts, home and auto insurance discounts, and an employee assistance program (EAP). Many employers receive Affordable Care Act guidance and compliance, while their employees get access to consulting services by licensed benefits professionals. The benefits vary by PEO, as does the cost.
PEOs offer small businesses an affordable way to package all of their HR responsibilities together, including payroll and taxes. PEOs can process your employee payroll with CPAs, prepare and distribute payroll checks, employ direct deposit, and process employee liens and garnishments. PEOs take care of your employees’ paid time off, track their sick and vacation time, and prepare and distribute their W-2s.
Many PEOs offer quarterly and year-end state and federal deposits and filings, along with detailed management reports. The PEO you partner with should be able to take care of all your employee payroll needs. By including this cost into the PEO’s total, you can ultimately save money on your payroll being handled by financial professionals.
Bottom Line: A PEO allows you to operate your business with the peace of mind that your employees are being paid properly and on time.
Risk and Compliance
Managing risk and legal compliance is an important part of running a small business. However, if you work with a PEO, it can manage much of that for you. Depending on your business’s industry, this could be a great deal of work handled by someone else. The level of compliance and risk that a PEO manages varies, but many PEOs perform tasks like managing ACA coordination and compliance, running on-site safety inspections, performing accident investigations and job hazard analyses, allocating workers’ compensation coverage, and maintaining OSHA compliance for your business.
A PEO ensures your business takes the appropriate measures to maintain workplace safety. Some PEOs provide employment practices liability insurance coverage, safety and loss prevention programs, Health Insurance Portability and Accountability Act (HIPAA) compliance, and Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance. There are several other compliance measures that PEOs can take to keep your employees safe and ensure that your business abides by legal employment guidelines. This alone is reason enough for some businesses to partner with a PEO.
Training and Development
A benefit that some PEOs offer is employee training and development. Many offer online and on-site training courses that your employees can take to enhance their skills. They can access courses on communication, sexual harassment and discrimination, hiring and firing, disciplinary actions, leadership, social media, workplace technology, and even industry-specific training.
Not all PEOs offer continuing education courses, and the courses that are offered vary by company. However, at the very least, most PEOs can train your staff on necessary workplace concepts like avoiding sexual harassment and discrimination.
Make sure the PEO you partner with assigns you a designated team of experts who can handle your HR, risk management, benefits and payroll needs. You want to partner with a company that provides specialists in each area, as well as a relationship manager who can help you take advantage of all the services the PEO offers. Sometimes, the HR consultant doubles as a relationship manager, which is also a good option. The best companies have HR consultants who are certified by the Society for Human Resource Management. SHRM certification ensures that your account coordinator is more than just a company relationship manager.