9 Facts About Professional Employer Organization (PEO) Services
A Professional Employer Organization (PEO) offers comprehensive HR solutions for small businesses, such as payroll, benefits, HR, tax administration, and regulatory compliance services. By being able to provide payroll, benefits, and HR services for small businesses and assist with compliance issues under state and federal laws. PEO services permit small companies to improve productivity and profitability to focus on growing the business.
Through PEO companies, the employees of small businesses can gain access to employee benefits usually available for large companies, such as 401 (K) plans, dental, life, and other insurance and benefit plans.
PEO companies can take on human resources and administration roles for your business because of a practice called co-employment. The contract between the small business and PEO company distributes part of the employer’s responsibilities such as HR-related administration to the PEO company. By being able to share employer responsibilities, your small business can access the same benefit and perks as larger employers. A PEO company will take care of handling payroll administration, tax filing, HR support, and access to the market. Find the best PEO HR companies at retireat21.com that could help your business with a search on the web.
How Does it Work?
The PEO will work with you through the co-employment agreement. A co-employment deal is a contract that has the employer, and the PEO company has shared responsibilities. Through sharing responsibilities, your business will be able to leverage the help a PEO can provide. So, the PEO company will handle payroll administration, tax filing, and HR support. You will be responsible for the day to day operations of your business.
Below are nine facts about PEO services from The National Association of Professional Employer Organizations (NAPEO)
1. Businesses that use PEO services grow seven to nine percent faster, employee turnover is ten to 14 percent lower with the use of a PEO service, and are 50 percent less likely to go out of business than comparable small businesses.
2. PEOs provide services to about 156,000 and 180,000 small and medium-sized businesses and employ approximately 2.7 and 3.4 million people.
3. A PEO service offers access to a broader range of HR services at the cost of $450 lower per employee.
4. Businesses using PEOs are more likely to offer employer-sponsored retirement plans and other employee benefits, which will help attract and retain employees.
5. The PEO industry is a $136 to $156 billion business.
6. According to NAPEO, the average company has approximately 16 worksite employees. This number grows as a larger corporation is discovering the value in PEO services.
7. PEO services manage payroll administration duties from a direct deposit of paychecks into employee’s bank accounts to changes in tax administration.
8. A PEO service takes over responsibility for complicated and ever-changing, non-revenue producing tasks that allow businesses to focus on their bottom line.
9. According to NAPEO, the PEO industry is one of the fasted growing business services in the United States, and annually the sector generates $42 billion in gross revenues.
A PEO company helps with human resources, compliance, payroll, risk mitigation, and lots more. Going into a contract with a PEO company can help you with specific business administration and improving your work environment by having the ability to provide employees with benefits. Usually, clients of PEO companies are smaller businesses with 19 employees. If you are a smaller business, and struggling with the administrative side of your business, then looking into a PEO service is something you should consider.