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A List of 10 Common
Employer Problems PEOs May Help Solve
1. Time
PEOs can help remove non-productive tasks that eat away employers time
and resources so they can focus on bottom line activities such as
strategic planning, marketing, and customer service. The logic is
that employer can make more money if given more time to work the business? Time is money in business.
2. Cash Flow
PEOs
may improve your cash flow by integrating most of the employee cost-centers
into a single cost factor per $100 of payroll; including employer
matching FICA, FUTA, SUTA, Work Comp, Administrative Overhead, and
employee benefits. Cash flows in real-time right along with
business income and revenue.
3. Workers' Compensation
PEOs may help buying and maintaining work comp easier than purchasing a
direct bill stand alone client policy. No more large
down payments. No more year-end premium audits. Work comp is
built into the PEO factor so employers only pay for the insurance the
need as its utilized. Some PEOs have leveraged buying power that can
save you money by using their insurance policies.
4. Employee Benefits
PEOs
often have turnkey benefit plans in place for clients' employees. Imagine
instantly adding a 401(k) plan, a Section 125, Group Dental, Life, and
other valuable benefits to your business without spending a fortune.
Employers may benefit from having a PEO manage the programs, payroll deductions, and
benefit records, making employee benefits easier to provide and manage.
5. Government Compliance
PEOs
help simplify all the rules and regulations associated with employing
people. They can assist you in complying with all federal, state, and
local laws and statutes. PEOs also provide legally required
employee forms and paperwork. And they usually maintain and store employee files.
6. Human Resources
Some PEOs act as an employers personal HR Department, assisting with
employee handbooks, job descriptions, record management, supervisory
training and conflict resolution. Often employers current business practices and policies
do not help protect
them employee lawsuits. Good HR PEOs provide a reliable source to
get
employee-related questions answered by real HR professionals.
7. Operating Leverage
PEOs
help create operating leverage for employers by creating a fixed cost
for employing people. Rather than having to increase internal
investment in human capital and equipment to keep up with external
growth, PEOs may provide a predictable mechanism that allows you to
increase profits at a greater rate than internal costs.
8. Employee Turnover
PEOs may help
reduce employee turnover be establishing better systems, policies and
benefit packages. Employee turnover can cost employers thousands
of dollars a year in lost production and employee re-training. A
good PEO may help keep employees more loyal and motivated.
9. Risk Management
PEOs
can really benefit some employers with workers compensation experience
modifiers above 1.00. They can offer sound advice for improving
workplace safety and preventing claims from occurring. Some PEOs
will help proactively manage their clients' work
comp claims and work with them to reduce claim costs and help investigate
potentially fraudulant claims.
10. Payroll & Taxes
PEOs become a co-employer with with their client companies. The
PEO issues paychecks, W-2’s, direct deposits and tax deposits. And
they assume the employers tax liabilities and responsibilities as the
IRS employer of record. This co-employment agreement and payroll
administration often helps insulate or reduce employers liabilities.
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