A POE, or a Professional Employer Organization, is an accredited organization that offers a number of services to small and mid-sized businesses. These services can include payroll and benefits management, risk management and employee training, and more. If you’re running a small to medium-sized business and you’re unsure whether a PEO is right for you, consider this handy guide on PEOs and the services they provide.
When you sign on with a PEO, your employees essentially become a part of the PEO. From that point on, your employees are also the responsibility of the PEO, giving you a sort of “co-employer” relationship with the PEO. This might seem like a risky move, but keep reading to learn how this not only saves your organization money but also improves its efficiency.
Payroll Services and Taxes
Taxes can be a huge stressor by themselves. Withdrawing the correct amount from each employee’s paycheck, filing forms, and maintaining compliance make for quite the task. A PEO will take over this responsibility, as well as managing employee compensation.
Finances are the top concern for your business, so making the process more efficient can only serve to better the business as a whole. Not to mention, by joining your employees with a PEO services’ employee pool will give you access to better healthcare and benefits rates.
Speaking of benefits, this is another item you can choose to have managed by your PEO. They’ll likely even have access to some great benefits packages you can offer to your employees, increasing their overall happiness and making your business more appealing to future prospects.
Some PEOs include risk management solutions for small businesses. This can include risk management plans to assess your company’s risk factors, risk response services for when risks become reality, and more. Risk management is definitely a useful service, especially for businesses that operate in dangerous or otherwise overly-risky industries.
Training is one important factor in reducing and managing risk, and many PEO services include employee training in their packages. Training also helps alleviate some of the liability associated with any workplace accidents. You’re more likely to be held liable for an accident if the employee hasn’t received training in a particular area where they got hurt than if you have training documents on file.
Never underestimate the power of a good risk assessment. You’d be amazed at what the assessment may identify as potential risks, as they’re often things that aren’t easily recognizable as risks by themselves. Hiring a PEO can help you avoid risks and create better plans for managing them before they become a liability.
Other risks like tax penalties for incorrect filings can take a toll on your business. Those steep fines for incorrect taxes can set you back on projects and profits alike. A PEO will handle your payroll compliance for you, ensuring that everything is filed correctly and at the correct time.
Compliance can be a labor intensive, complex process that can lead to errors. Errors on payroll don’t sit well with the IRS, but also create problems with your employees, increasing turnover rates and overall dissatisfaction among your workplace.
Don’t leave something like taxes to an amateur. PEOs are experts at payroll deductions and other tax factors, so your business’s taxes will always be in order. One less stressor can only serve to better your business overall. Find an expert New York PEO company on sites like Careful Cents.
Will a PEO Help Run My Business?
While PEOs provide many great services, unfortunately, running your business is not one of them. Payroll, benefits, and other HR functions fall under the PEO’s jurisdiction, but the other aspects of your business will remain your responsibility.
Think of a PEO as a time-saver. You won’t have to spend hours worrying about payroll deductions and benefits packages, so you’ll be able to focus on other important aspects of your business instead.
How Much Does It Cost?
The cost of your PEO service will vary according to your business’s individual needs and the company’s price structure. Generally, PEOs charge either a yearly, per employee, or percentage of total payroll fee. This will depend on the company, but it gives you some idea of how you’ll be charged.
Some PEOs require a certain number of employees before they’ll even consider working with you. Check the company’s requirements, as well as their credentials and reviews before making a decision to partner with them. The last thing you want to do is leave your employee’s payroll and benefits in the hands of an incompetent company.
Compared to the price of hiring a full-time HR and payroll staff, a PEO service is actually quite affordable.
Overall, hiring a PEO for your business is a good decision. Risk management is incredibly important for minimizing risks and managing them when they become liabilities. Payroll and benefits management takes the worry out of keeping up with compliance and wages, and employees will be grateful for a well-managed payment structure.
Remember that not all PEOs are created equal, and it’s vital that you perform research on any company you’re looking to partner with. Be sure the organization is accredited with both the IRS and the ESAC. This ensures that the company you’ve chosen has completed the necessary requirements for quality practices, and is held accountable for any malicious or otherwise faulty services.