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THE PEO RELATIONSHIP

A Professional Employer Organization or (PEO) assumes responsibility and liability for the bulk of your employee administration roles. These roles include workers compensation, human resources, payroll, and labor law compliance.

Leverage a PEO to Increase Profitability

Your companies' existence and profitability relies heavily on the services that a PEO provides. The five facts listed below illustrate the importance of maintaining a reliable process for maintenance of your employees.

  1. On average a small business owner uses 22 hours a week of their time on record keeping, budgeting and compliance issues.
  2. A major cause of complete business failure is lack of competent employee maintenance, utilizing a PEO eliminates this concern.
  3. The Bureau of Labor Statistics reports that %50 of new hires quit within 6 months and that the cost to replace is close to $1200 per instance.
  4. Small to mid-sized businesses have a hard time affording quality benefits packages which, in turn, makes it hard to attract and retain good help.
  5. Important company issues are typically not handled by those with experience or training in these areas when dealing with small business.

Maximize Efficiency with a PEO

Over 100,000 business owners currently utilize PEO services and that number is rapidly rising. PEO Services will allow you to:
  1. Become much more of a player within your segmented market.
  2. Lower and maintain your labor costs
  3. Lessen time constraints by taking over tedious tasks
  4. Ease the concern of compliance with each and every labor law
  5. Hire and keep the most talented employees available

PEO - The Problem Solver

Time - What would you do as a small business owner if you had more time? More often than not, the answer is "focus on my day-to-day business." Peo's allow you to do exactly this by taking rigorous tasks off of your desk, so you can spend more time on things like strategic planning, marketing, and customer support.

Payroll & Taxes - A PEO becomes a co-employer with you by issuing payroll checks, assuming responsibility for direct deposits, tax deposits, and W-2's. Your company's tax liability and responsibility is all but eliminated as the PEO serves as the IRS employer of record.

Cash flow - PEO's help stabilize your cash flow by integrating most of your employer costs into an individual cost factor per $100 of payroll. These employer costs include FICA matching, Federal Unemployment Tax (FUTA), State Unemployment Tax (SUTA), Workers Compensation, employee benefits and Administrative Overhead. Your cash flows proportionate to your business income in "real-time".

Employee Turnover - By streamlining systems, creating better policies and providing better benefits packages a PEO will greatly reduce, if not eliminate, employee turnover. Every time you experience a lost employee your business incurs thousands of dollars in production loss, as well as time and money spent on training and hiring. PEO's keep employees happy and continuously accept their feedback.

Operating Leverage - By committing to a PEO solution you immediately create operating leverage for your business. PEO's create a fixed cost for employing people, which allows for more accurate budgeting and better efficiency in the allocation of company funds. Increased profits allow you to grow your business as your internal costs are reduced.

More Business Concerns include:

Who's the Boss?

This is a question that commonly arises when dealing with PEOs and the services that they provide. Managers and owners of small business alike share the concern or question of whether or not decisions regarding employees will be changed due to the presence of a PEO as the employer of record. Various responsibilities are shared within the "co-employment" bond. All daily activities of the staff are managed by the employer and the PEO covers the rest.

Basically, the customer is the boss and had the right to dissolve the PEO relationship at anytime with a 30 day notice. Make sure the language included in the contractual agreement with a PEO covers all the tasks that they promise for your organization and that tasks that will continue to be monitored by your current staff is outlined as well.

Selecting the Correct PEO

Below is a list of steps we recommend you take when choosing a PEO for your business.
  1. Make a current assessment of all of your risk management and human resource shortcomings or needs
  2. Be certain that the PEO provider has the ability to fulfill all of your current needs.
  3. Always request a list of current relationships and references for your peace of mind.
  4. Request a demo of their premiums and payroll taxes having been paid.
  5. Request financial statements including banking and credit information.
  6. Inquire on the funding of benefits and whether or not the PEO is being internally funded or completely insured.
  7. Make sure the benefits that are being offered fit the needs of your employees.
  8. Read the service agreement and double-check each parties' provisions, guarantees, liabilities, and responsibilities.
  9. Make sure the PEO covers all State Requirements applicable to your business
  10. Always have a sit down with those who will be handling such an important part of your business activities.

Understanding Implementation

GoPEO.net is committed to helping you understand exactly what it will take to outsource administrative responsibility in Human Resources and employment liability for your business. Our comprehensive quote will allow you to assess the organizational and cost benefits that GoPEO.net can offer.
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