Could You Benefit by Using a PEO?

To fully answer that question, you'll first need to know exactly what a PEO is and what it does. The PEO acronym stands for Professional Employer Organization. It serves as a Human Resources department for small and mid-size businesses, but it won't do your staffing for you. It goes beyond being a payroll service by assuming many of the liabilities for government compliance. PEOs can make it possible for small and mid-size businesses to offer retirement and medical benefits similar to the big corporations.

Many growing businesses start considering the benefits of a PEO when they realize that they need relief from all the administrative details of keeping the company going. Using a PEO to help with administrative functions is a lot like being able to purchase efficiency for the nuts and bolts of your company because the HR functions are outsourced.

One benefit of using a PEO is that you don't have to worry about keeping up with changing government rules. You pay the PEO to do that, and because they serve other businesses as well, it is more efficient than having to reinvent your own wheel. This can extend to work-related laws, unemployment claims, safety procedures, and even anti-drug use policies.

Another benefit of using a PEO is that they offer comprehensive payroll services. Beyond the basic bookkeeping and issuing of checks, they can also cover such things as payroll taxes and paperwork, garnishments, W2 and 1099 filing, and verification of an employee's work status.

A full-service PEO can offer your business additional services as needed. They can assist with pre-employment background checks, drug testing, applicant reviews, termination assistance, help in preparing job descriptions and employee performance appraisals, and needs analysis. An all-inclusive contract with a PEO will include access to training and other business resources and support.

The benefits offered by a PEO are clear. It frees that average company to become more productive in the use of time and resources. The companiy's primary focus can be centered on producing goods, delivering services and generating income. For a small business owner or the management team of a mid-size business, this means that the HR paperwork and compliance issues are far less of a distraction and you can get down to work.