What Is A PEO and How Does Your Business Benefit from Partnering With One?

What is a PEO, and who actually needs one the most? The acronym “PEO” stands for “professional employer organization.”

To view it in another way, a PEO is a “business partner” who shares employment risks & liability with your company. PEOs allow your firm to focus on bottom line initiatives like making money, generating more sales, or producing actual products, rather than handling all the usual headaches and problems that go with being an employer.

What does the PEO primarily do? The professional employer organizational arrangement allows the client company to outsource many of the time consuming, complex, and expensive tasks of being an employer. Duties like weekly payroll and tax administration, workers’ compensation, human resources, safety/risk management, and benefit administration are just some of those tasks that can be taken off the company’s plate.

Partnering with a PEO allows businesses to “push less paper” and spend more time on your core competencies and more time making money! A PEO can also be considered as a “co-employment” or “shared employment” relationship between the client company and PEO provider. Yet, the client retains 100% direction and control over the daily actions of its employees. But no longer has 100% liability as an employer.

So, how does a professional employer organization truly help, and what is the ultimate benefit of using a PEO? An outstanding PEO arrangement can provide the following advantages:

  • In PEO arrangement, the same administrative duties (which make you no money) can be performed by the professional employer organization for a much lower cost than that which the client can do it themselves.
  • Unemployment claims by employees and injury claims for worker’s compensation are now handled by the PEO provider. Weekly payroll administration and tax deposits are the responsibility of the PEO also. Employee handbooks and safety manuals are created by the PEO and tailored to the specific needs of the client company.
    Clients now have professional help with safety and risk management issues along with assistance dealing with OSHA compliance.
  • PEOs also allow the sometimes lesser experienced or start-up business owner to economically hire experts in Payroll, HR, Safety, etc… who specialize in labor intensive industry issues. Owners no longer are forced to wear all those hats or spend hundreds of thousands of dollars for this expertise, nor do they have to hire several employees to do these tasks, they can simply outsource those time consuming functions to the PEO provider.
  • The PEO can actually remove many of the client’s burdens with administrative & tax filing duties also because it directly assumes these responsibilities.

In the state of Texas, for example, a high concentration of blue collar companies exist. These are typically the types of firms which often need, or actively seek assistance with handling employee-related issues.

Now you have some good answers to the question, what is a PEO? Yet, could you use further help?

Should you need more information about the advantages of using a professional employer organization, www.M2Peo.com

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