When a business owner is looking to outsource a portion of their operations, the first thing they typically look for is a payroll company to take over all of the functions related to paying employees. However, a payroll company is just that; they offer support for payroll-related services, but the employer remains responsible for everything else. A PEO can do that too, and so much more.
 

What Makes a PEO Different from a Payroll Company

A PEO is a full service program designed to enable a business to grow their business faster than their competitors. Aside from being relieved of payroll-related duties, businesses receive support from partnering with a PEO in a number of areas including benefits, compliance, recruiting, safety, workers’ compensation administration and more. Small businesses that partner with PEOs have been shown to grow 7 to 9 percent faster, have a 10 to 14 percent lower rate of employee turnover and are, on average, 50 percent less likely to go out of business than small businesses who don’t. Below are some of the top ways that businesses benefit in a PEO partnership.

1. Employee Benefits
Benefits are one of the biggest reasons that businesses partner with PEOs. The PEO itself carries the policies, which allows small businesses access to more cost-effective and comprehensive benefits that they wouldn’t otherwise be able to obtain. Having a full range of benefits to offer employees gives them an edge in recruiting and retaining top talent. The PEO handles all benefits-related administrative tasks on behalf of the employer, including enrolling employees, managing claims, providing legal notices and handling COBRA administration.

2. HR Compliance
Not keeping up-to-date with the constantly-changing landscape of employment laws, regulations, and other HR-related requirements can be costly, especially for a smaller business. It can be difficult to stay on top of labor and employment laws while also trying to grow a small business, but a PEO can take over the responsibility of regulatory compliance and keep the employer up to date on all of the latest labor updates, allowing the business owner to focus their time and energy on growing their business instead.

3. Technology
Partnering with a PEO can allow a business to leverage HR technology that provides time and money-saving services for employees. Through a PEO’s Human Resources Information System (HRIS), employees can participate in electronic onboarding, enroll in benefits, manage time and attendance and time off requests, access announcements, view company policies and more.

4. Recruiting and Hiring
It’s a job seeker’s market right now with the current unemployment rate and skills gap, which means that many businesses are having to put more resources than usual into recruiting and hiring for their open positions. Many PEOs offer recruiting and hiring expertise as an additional service to employers. Considering the time and money that goes into placing job ads, screening applicants, conducting background checks and onboarding new employees, this added service is extremely valuable to smaller businesses.

Partnering with a PEO allows businesses to gain more HR resources without the added burden of having to hire more employees.

Have an HR Question?

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About Emplicity:
Since 1995, Emplicity has provided a smarter, more secure, and integrated platform of employer services to its 300 business clients and their 8,500 employees. As a Professional Employer Organization, or PEO, the California-based HR outsourcing firm simplifies the compliance, administration, and support businesses need in the areas of employee benefits, payroll, and human resources technology.

For more information about us, visit www.emplicity.com or call us at (877) 476-2339. We’d love to make your employee management more simple—and secure.

NOTICE: Emplicity provides HR advice and recommendations. Information provided by Emplicity is not intended as a substitute for employment law counsel. At no time will Emplicity have the authority or right to make decisions on behalf of its clients.

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