Why use a P.E.O?
A PEO is a Professional Employer Organization. We’re not all the same, but generally, we’re HR experts who help small-business owners save time, worry less, and access better employee benefits for a better price.
How? Our experts take care of three main areas:
Payroll & HR Administration: We handle payroll, paperwork (like employee onboarding and filing forms by important deadlines), and other admin duties that eat away at your free time.
Compliance: This includes workers’ comp, exempt and nonexempt status, workplace policies, and other legal requirements that keep you up at night.
Benefits: We help SMBs offer big-business benefits plans by pooling our clients’ employees for increased buying and negotiating power. Translation: better benefits at a lower cost.
All this means you have time to focus your attention on your core business operations. If that sounds like a net positive, that’s because it is: small businesses that use PEOs grow up to nine percent faster and have up to 14 percent lower turnover than those that don’t.
Here’s a deeper dive into some of the things working with a PEO will let you do.
Offer Plenty of Excellent Options for insurance benefits
Here’s the thing about health insurance: your employees want it.
And really, they want you to offer it. The cost of buying insurance as an individual on the ACA exchange increased 25 percent in 2017, and uncertainty in the market suggests the upward trend will continue.
When you work with a PEO to secure health benefits for your employees, you win in four ways:
You get access to economy-of-scale pricing you’d have as a larger company. We pool all our clients’ employees to negotiate better rates from insurance companies, which means you and your employees pay less for better coverage.
You don’t have to sweat the details. Our in-house benefits experts do that. All you and your team have to do is choose the plan that works best for you.
You also get access to other types of insurance: disability, life, dental, etc.
Your employee satisfaction goes up, which means employees are more likely to stay at your company, which means you can keep turnover costs to a minimum.
Retirement funds: Prosperity for Employees’ Old age
It’s a pretty simple equation: You want to take care of your employees and they don’t want to eat cat food when they retire. Oh, and you don’t want them to jump ship for another organization that offers a sweet 401(k) and match.
Don’t worry! A PEO can set you up with competitive retirement funds that work exactly the same as what Fortune 500 employers offer. The best part is that we’ll take on all the fiduciary responsibility so that you don’t end up with penalties and fines because you didn't file something correctly.
Oh, and one more thing: small businesses that use PEOs have higher participation rates in their retirement plans than those that don’t.
Employee Taxes: Payroll TaxEs withhOlding
As you almost certainly know, withholding the right amount of taxes for your employees is at best a headache waiting to happen. And what about the new tax law that just passed? And what about Terri, who’s got a lot of freelance work and was wondering if you could update her withholdings, and of course you can, but do you even remember which form you need to fill out for that and what you’re supposed to do with it?
Trust me: you don’t.
But with a PEO, you don’t need to. We’ll take care of withholding the right amount of taxes for unemployment, FICA, state income taxes, and everything else you’re expected to do as a business owner. We’ll even make sure we’ve got all the right paperwork on file and send out W2s at tax time. Or 1099s! Or whatever other employment-related tax forms you might need to send.
Workers’ comp and risk management (aka Phew! Everyone’s Okay!)
You know you have to have workers’ comp insurance. And you have to have that poster. And also – what else?
It depends. That’s where your trusty PEO comes in. We’ll help make sure you’re complying with not only state workers’ comp rules (and yes, they’re different in every state) but also with other risk management laws and regulations based on your industry and location.
We can also help you manage other kinds of risk, like the risk of an EEOC lawsuit alleging you improperly fired someone or that your actions constituted harassment. Those issues are no fun to deal with. They’re also expensive and time-consuming. Your PEO can help make sure you avoid situations that lead to those lawsuits in the first place and, if one arises, it can help you through the legal process.
HR consulting: Practical Expert Opinions
Here’s the thing: not every HR problem involves forms and paperwork. Some of the questions you’ll face as a business owner are abstract and nuanced. You might be wondering, for example, whether to hire a more expensive, more experienced person who could start making a difference on day one or a less expensive, less experienced person you could train.
You might be wondering how to handle leaves of absence.
Or maybe you’re not sure what your mid-level employees need to jumpstart them into leadership roles.
Your PEO can help. At Cognos, we especially enjoy the strategic consulting side of HR. I mean, we can handle the nitty-gritty administrative tasks, but we really get a thrill from helping our clients think about the big picture and visualize how HR decisions can shape the future of their business.
Payroll: Paychecks? Everything’s Organized
In the category of “saving the best for last,” let’s talk about making sure your employees get paid on time. Trust me: they are SUPER into that. And so are we! (And, to be fair, so is pretty much everyone else.) We’ll take care of that, no problem. In fact, even if you’re looking for a way to outsource only your payroll duties, a PEO might be a great choice. You never know what other benefits might sound good down the road.
Professional Employer Organizations: What’s Not to Love?
PEOs are an incredibly powerful tool for small-business owners. I wanted to prove that to you by using PEO acronyms for the main services we offer, but I think a summary list will also be powerful (I get it – you’re busy. You skim).
PEOs can make your life easier by giving you access to the benefits, expertise, and infrastructure that big companies have. On a concrete level, that means we take the following HR-related activities off your plate:
Health insurance (and other types of insurance: dental, vision, life, disability, etc.)
Payroll and payroll tax administration
Workers’ comp and other types of liability management
HR administration (employee onboarding, leave of absence management, unemployment administration, etc.)
Strategic HR consulting
Whether you’re looking for a better payroll solution, better prices and options for health insurance, or a full-scale expert partner to take HR duties off your hands and free up your time, a PEO can help. If you’re curious about hearing specific details about we can do for your business, sign up for a free consultation. We look forward to hearing from you!