Professional Employer Organization (PEO)
A professional employer organization (PEO) is a full-service HR company that specializes in co-employment outsourcing, in most cases contingent and freelance workers.
Such a company enables your business to hire employees from anywhere in the world, while taking on a number of tedious and demanding administrative tasks that relate to employee management, such as benefits and payrolls.
By doing all the difficult work for you, PEOs can be incredibly advantageous for companies of all sizes, but here are some ways they might benefit small businesses the most:
As your small business grows, you will likely need new employees to support that expansion. However, finding skilled and experienced workers is difficult enough without having to spend additional money on onboarding, training, and other expenses.
That is exactly where a PEO comes in. Not only do these companies have more extensive resources and can offer guidance through hiring, but they also have access to the best, most knowledgeable talent across the globe, allowing you to always find high-quality candidates for open positions and the best fit for your company.
Managing payrolls and filing appropriate taxes can be quite difficult and time-consuming tasks for many small businesses.
Between different types of income, contributions, taxes, and deductibles, the payment process can be quite challenging to comprehend.
This is where PEOs can bring great value as well. By having access to industry experts and helpful payroll software, PEOs can help to simplify the payment process, eliminate mistakes, and ensure wages are delivered on time, effectively lightening the load on small businesses.
From misclassifying workers to offering employees shares instead of pay, small businesses can often violate regulations, even if it is without intent.
A PEO can be of great help in this regard, allowing companies to minimize liability. This is especially important when it comes to hiring international workers, as an expert Global PEO can easily allow you to stay compliant.
Such professionals will take care of certain aspects of employee management such as payroll, risk and safety, and other administration tasks, thus giving you the opportunity to have a great relationship with worldwide employees and their local governments, all without needing to establish your own legal entity.
Great employee benefits are crucial for attracting and retaining the best talent, but the expenses tied to providing these benefits can be especially high for most small businesses.
With a good PEO, you likely won’t have to worry about this aspect. Whether it’s health coverage, supplemental insurance, contributions to retirement savings, or even wellness programs in some instances, PEOs can offer a number of wonderful benefits to employees most small businesses simply can’t afford.
As a result, your company is left with happy and satisfied workers that aren’t likely to leave their current positions.
All things considered, working with a PEO can significantly lower your overall business expenses.
By managing payrolls, ensuring legal compliance, providing good benefits, and minimizing the need for tedious onboarding tasks, PEOs allow you to avoid some of the highest and most common costs related to hiring employees.
As you won’t have a real need for any experts in certain legal or financial fields to take care of these aspects either, you might be able to minimize your expenses even further by utilizing the help of a PEO.
Evidently, outsourcing your HR responsibilities to a great PEO can save your company plenty of time and money, and allow you to focus on what matters the most.
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