Top 5 Reasons Small Businesses Choose PEOs
WHAT IS A PEO?
A PEO provides HR services and support as part of a co-employment model. Co-employment means that the PEO, as the co-employer, is the employer of record and based on the allocation of responsibilities under the contract assumes certain responsibilities for payroll and payroll tax filing.
Your business remains the worksite employer with the rights and responsibility for all workplace decisions, including hiring and firing, compensation and more.
The PEO helps with critical HR functions for your business— such as payroll processing, payroll tax filings and access to benefits—and also providing consulting support and a technology platform to help you manage your HR.
There are five primary reasons to choose a PEO to help with your HR:
• Generate potential savings
• Access big company benefits
• Attract and retain talent
• Free up time and energy to focus on your core business
• Get access to HR expertsWhat’s the solution if you don’t have the budget for a big, dedicated HR department?
Approximately 173,000 businesses nationwide—more than 15% with 10 to 99 employees* —have chosen a professional employer organization (PEO) to help with the HR piece of their business and they are seeing the benefits.
Many small and medium-size businesses have their hands full focusing on their core products and services. That doesn’t leave much time to wrestle with human resources (HR) concerns.
Yet, HR functions—everything from attracting and retaining talent to managing payroll processing, benefits, risk mitigation and compliance—are essential for any successful business.
Each year the U.S. government provides billions of dollars in incentives to innovative businesses for developing and improving technologies, products and processes. Many businesses perform activities that qualify for the research and development tax credit without realizing it. Companies that do know about the tax credit often fail to pursue it because of the complicated application process.
TriNet Clarus R+D software and service make it easier and less time-consuming for businesses to help determine if they qualify for the incentive and to help complete the claim process so businesses can take advantage of the tax credit.
This is just one way that TriNet can help your businesses identify savings that can make a real difference for your bottom line.
Reason #1
In addition to operational efficiency, a PEO helps enable your business to leverage economies of scale. A PEO works with industry leaders in different benefit categories so your company can get access to premium benefits —such as health insurance, retirement plans —that might be harder to obtain on your own.
With a PEO, you also get access to HR professionals who provides expertise on HR issues that affects your business.
Of surveyed Customers reported cost savings in HR-related spending when using TriNet*
*TechValidate survey of 160 users of TriNet (2022)
Reason #2
Small business leaders know that it is not easy to access premium level benefits that are cost effective for your employees.
A PEO will help do the heavy lifting for you.
PEOs can help your business access big-company benefits—health care, retirement and more—by negotiating with carriers on your behalf for benefit
options that a small business may not have access to on their own, and then taking on the responsibility for benefits administration. This is a time-saving edge for small businesses that care about the benefits they offer to their employees.
- A compensation study to help you get the information on current competitive salary trends for your job openings
- Access to large-group health insurance benefits and retirement plans, which are essential to building an attractive compensation package
- Access to nontraditional benefits, such as commuter benefits and pet insurance, which are increasingly important to employees
- HR guidance and best practices for recruiting and training
- Stay on top of regulatory changes from the HR expertise the PEO provides so you can comply with federal, state and local rules and requirements
- HR software for you and your employees to manage time off, and view benefits and payroll information from a mobile device
Reason #3
Employees are central to your company’s success, but competition for top talent can be fierce.
A PEO can help you with strategies for attracting and retaining talent, from best practices in recruitment, compensation trends and benchmarking, employee development and access to big-company benefits so you can compete with much larger organizations to hire and keep the talent you already have.
HR DEBT
Reason #4
You probably are not in the HR business, yet HR is critical to the success of your business. Keeping up with all the HR trends, requirements and HR best practices distracts many SMB leaders from their core business objectives. A PEO can help with those HR distractions so you can focus on what you know and do best.
A PEO can help improve your company’s efficiency with services, tools, technology and dedicated professionals that helps to streamline complex HR tasks.
The right technology platform alone can make an enormous difference. Many businesses acquire piecemeal HR solutions as the company grows. This can be cumbersome to manage, and it also can make it hard to get a comprehensive picture of data that can be important to the success of your business. This may lead to HR debt.
Top PEOs offer an HR platform that helps make it more efficient and easier to complete HR tasks and to consolidate all your people data into actionable information.
Reason #5
That’s not only time-consuming, but it’s also unlikely to give you reliable answers to questions that can have both financial and compliance implications.
According to a study by the Central Statistics Office (CSO), around 62% of all information on the internet is unreliable**. You shouldn’t have to rely on the web when you’re making critical decisions for your business.
When working with a PEO, you get access to experienced HR experts who can help guide you with best practices on topics ranging from employee relations and compensation strategies to recruiting, performance problems, diversity, equity and inclusion programs, and developing an employee handbook.
These HR experts are also aware of regulatory changes to help you stay compliant with ever-changing employment rules and requirements. Some PEOs also offer employment practices liability insurance coverage for certain employee-related claims.
**https://www.cso.ie/en/releasesandpublications/ep/p-isshisi/householdinternetsecurityandinformationintegrity2021/informationintegrity/
HR is extremely important, but it is also complicated and time consuming for many small businesses.
When you choose a PEO, you can have the best of both worlds—the perks of exceptional HR services and the time back so you can focus on your core business functions.
Ready to learn how a PEO can help your business?
