NOTE: Blog snippet below is from Entrepreneur Magazine.
Here’s all you need to know: A Professional Employer Organization (PEO) is one of the best-kept secrets of many successful small businesses. Essentially, these bodies handle all your HR needs, including payroll and administration, employee health and retirement benefits, workers’ compensation insurance, state and federal compliance issues and even worker training.
All you’re left to do is hire, supervise and promote (or fire) your employees as needed. Of course there is a cost for contracting out your HR department, but consider this list of positives.
- PEOs manage thousands of employees and can therefore purchase insurance and benefit plans at a significant savings or allow you to offer higher-quality plans to attract and retain skilled employees.
- Experienced professionals in HR, benefits, payroll, risk management and other aspects of employee administration are on the job. Want to institute a 401(k) plan or flexible spending account? The PEO will do it. No need for you to figure it out yourself.
- The PEO will provide HR manuals for your employees, and the policies and procedures will be maintained in compliance with ever-changing state and federal laws and regulations.
- A PEO will help with employment-related regulatory compliance (ADA, payroll, OSHA, EEOC, etc.), a huge advantage that can be worth more to your business than the money saved on benefits costs.
- The PEO can provide effective management and access to payroll records, benefits, personnel data, vacation and sick-time accruals and specialized reports.
- If you have an HR-related employee claim, such as a discrimination allegation, a PEO will know what to do and will take the lead on managing the claim process.
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