How can PEO services help you attract great employees to your business?
When small businesses offer competitive benefits to potential employees, they are in a better position to attract and retain top talent; this is where PEOs come in. A PEO allows you to offer your employees affordable health benefits with reputable health insurance companies, as well as additional benefits such as supplemental insurance plans (e.g., FSA, HSA and HRA), employee perks (e.g., home and auto insurance discounts, parking and commuting benefits), and retirement savings accounts like 401(k) plans.
Additionally, a PEO can help you maintain risk and legal compliance. This can reduce legal problems for your business, helping you earn a positive reputation in your community and reduce employee turnover. Since many employees seek an employer that can offer continued education, partnering with a PEO that offers training and development courses can entice top talent as well.
What is the difference between a PEO and a staffing company?
Although they seem similar, PEOs and staffing companies serve different HR needs. The primary benefit of a PEO is that it handles tedious and time-consuming HR tasks, such as administrative work, payroll, employee benefits, risk and compliance, and employee training and development.
A staffing company, on the other hand, primarily serves short-term or temporary employment needs. Staffing companies handle other HR-related tasks, such as payroll and unemployment taxes, but often with much higher fees for these services. Small businesses should consider partnering with a staffing company only if they need temporary staffing.
What is the difference between a PEO and an HR outsourcing (HRO) company?
A PEO is an affordable HR option for many small businesses, as it can handle all your HR functions under a co-employment model. A PEO removes the burden of many HR tasks and gives small businesses peace of knowing that critical functions like risk and compliance are being managed by HR experts.
HRO services can handle many of the same HR functions as a PEO, but they operate as a separate entity instead of through an employer partnership. Businesses that use an HRO can choose the HR functions they need to outsource, whether just payroll and employee benefits or a full-service HR suite. HR outsourcing is better for larger companies that need assistance with specific HR tasks only.
What is the difference between a PEO and an ASO?
A PEO and an administrative services organization (ASO) both provide HR services, with one major difference: the employment relationship. PEOs use a co-employment model (meaning the PEO is the “employer of record” for employees); under an ASO partnership, the ASO offers assistance with HR services while the employees remain under the ownership of your organization.
Another difference between PEOs and ASOs is the specific services they offer. Both PEOs and ASOs offer HR services, but ASOs do not provide workers’ compensation insurance or employee benefits programs like a PEO does. ASOs are also more flexible in terms of the HR services you can outsource, whereas PEOs typically bundle services.
What do the best PEO services have in common?
The best PEO service providers satisfy your HR needs, whether those needs are HR administration, employee benefits, payroll, workers’ comp, risk and compliance management, or training and development. They use the latest technology and mobile applications so that businesses and employees can easily access their information. Great providers offer HR expertise and customized, one-on-one assistance to help you navigate your PEO services, regardless of how long you’ve worked with them. The best PEO services are transparent, easy to communicate with, and accredited by ESAC and the IRS.
What are the disadvantages of using a PEO?
When you partner with a PEO, that company is technically a co-employer of your staff. This can cost you some internal control over your team and processes, possibly having an outside influence on your company culture. Having an outside company manage your payroll and taxes might make you feel a lack of security as well. For these reasons, it is important to partner with a PEO that you trust and believe in. The right PEO can be a great asset to your company.
How long does it take to get started once I choose a PEO?
Transitioning your HR processes over to a PEO is a big undertaking, but it can ultimately simplify your HR responsibilities. The average PEO transition takes roughly four weeks, starting at the beginning of a payroll cycle, but it could take anywhere from three to six weeks. During this time, the PEO will work closely with your team to ensure all the proper paperwork is complete and successfully transitioned.
What is the advantage of using a PEO for recruiting?
One advantage of using a PEO is the ability to recruit top candidates. PEOs typically offer small businesses access to comprehensive employee benefits that they otherwise might not be able to afford, and these benefits can greatly impact the quality of employees they can hire and retain.
Additionally, PEOs employ experienced HR professionals who can help small businesses implement recruiting and hiring best practices. They understand the current employment laws and regulations that apply to recruiting, so they can help small businesses stay compliant.