HR Outsourcing Makes Good Business Sense
A PEO, or Professional Employer Organization, is a great asset to any business. By bundling your workers’ compensation coverage, payroll processing, HR services, and employee benefits into one package, you can save time and money. Outsourcing these tasks frees up a business owner’s time to focus on the core functions of the company so they aren’t weighed down by excessive administrative paperwork.
A recent study showed the following statistics about PEOs:
- Businesses that use PEOs grow 7 to 9 percent faster
- Have 10 to 14 percent lower employee turnover
- Are 50 percent less likely to go out of business
Advantages of a PEO for New Businesses
New businesses in certain industries, especially construction, may have a hard time securing a workers’ comp policy on their own. The risk related to their business functions is sometimes too high for an insurance carrier to want to take on. Alpha Business Solutions works with many PEOs that are willing to take on higher risk businesses by putting the business on their master policy. This allows new businesses to receive suitable coverage at an affordable price.
Other Advantages of a PEO
When a business forms a co-employment relationship with a PEO, the PEO runs their payroll and workers’ comp through the PEO’s FEIN and tax numbers thus taking on the compliance issues related to employment taxes and insurance. They remit the necessary taxes and payments to the state and federal government on you and your employees’ behalf.
When you are partnered with your co-employer, you will retain full control of your everyday business functions, and all the hiring/firing power of your employees. Bundling all your HR services means you have one payment for all of your services. When you acquire employee benefits through a PEO, you are also getting access to options that are usually only available to bigger businesses, and at a very competitive rate. The 401k programs, which help prepare your employees for their financial futures assist you in retaining the best workers.