What’s a PEO, and How Can It Support Your Business?

Staffing can make or break a small business. Owners and managers depend on each and every employee to make local businesses and startups run efficiently.

For a business owner, time is money! They focus their energy on revenue-generating activities and need to worry less about basic business functions like payroll, employee benefits, and human resources. But what if HR management and staffing solutions are falling through the cracks?

A professional employer organization — or PEO for short — is an organization that offers staffing and HR management services to small and medium-sized businesses. Contracting with a PEO can help businesses focus on growth and development instead of HR administrative tasks and payroll deadlines.

The modern-day PEO was introduced in the 1980s, but the term “employee leasing” was coined decades earlier in the ‘60s. While the two are different, PEOs were born from employee leasing evolving over time.

While PEOs are hired, they often reduce overall business costs when they take over multiple HR responsibilities like hiring, benefits, and documentation. Some will maintain business software, oversee payroll distribution, and handle vacation time or sick leave paperwork. When a business can’t afford an HR department but needs HR resources, a PEO is an easy fit.

5 Benefits of Using a PEO

A quality PEO can help a business control expenses, increase efficiency, and improve employee satisfaction. Specifically, a PEO can help businesses:

  • Save on HR costs: By outsourcing human resources administration to a PEO, there’s less need for a large HR department. An expert PEO company is able to balance multiple clients while putting time back into your schedule.
  • Offer more benefits: Small businesses often can’t provide the high-level benefits like medical coverage and retirement matching as large corporations. Professional employer organizations, however, can help smaller organizations offer competitive benefits like 401(K) plans to increase quality candidates for job openings.
  • Reduce employee turnover: Employee retention is one of the biggest workforce management challenges — one empty position can cost hours of resources to interview candidates and find a replacement while also slowing down the regular workflow during downtime. PEOs can improve employee satisfaction and help retain high-quality employees for years.
  • Support the onboarding process: The best employees are thoroughly onboarded with a structured process. PEOS can help medium and small businesses craft personalized onboarding processes and hiring procedures to fit your needs that will last for years. If your business is struggling to find quality candidates, a PEO can help outline job posting descriptions and improve the interview process.
  • Manage payroll efficiently: Employee payroll is one of the most important cogs to keep your business running smoothly. Allow us to take the payroll processing off your hands, issuing all the pay stubs, tax forms, and other documents.

How to Determine if a PEO is Right for Your Business

PEOs allow small businesses to shift their HR needs outside the office walls. When considering which PEO to partner with for your medium-sized business, it’s important to consider a handful of good characteristics:

  • Knowledge of regulations and requirements: Every state, country, and even some cities have their own human resource regulations. Be sure any company you partner with is aware of all the rules in your area from federal to local laws.
  • Use of modern technology: Technology should always be compatible. Remember the tech needs of your business and look for a PEO with human capital management software for an easy transition.
  • Funding for quality benefits: When it comes to employee satisfaction, find a PEO offering fully insured benefit plans.
  • Memberships with professional organizations: The National Association of Professional Employer Organizations (NAPEO) is a great place to start when looking for reputable PEOs in your area of business. Industry trade organization memberships often lead to quality contractors and PEOs.

Contact Us Today

With innovative technology, a knowledgeable staff, and personalized attention, TANDIUM is the cost-effective answer for total business support. Today’s business owners have found the solution with TANDIUM, a complete human resources service organization, offering PEO, ASO, HR consulting, and payroll services. Contact us today to learn how we can personalize our services for your business.