What is the Purpose of a PEO?

When human resources and staffing needs are falling through the cracks, a PEO can step in and get business back on track — all while saving money, too.

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.

Though PEOs sound new, the concept was introduced as early as the 1960s with “employee leasing.” By the ‘80s, modern-day PEOs were taking over tons of standard business tasks like employee handbooks, compliance investigations, business protection, and employee training.

How PEOs Help

PEOs can help 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.

PEO solutions like TANDIUM can take so many recurring responsibilities off small business owner’s plates, including:

  • Payroll administration: From W-2 preparation to complete payroll processing, PEOs handle all your payroll needs.
  • Total human resources: Onboarding new employees and maintaining employee relations can be time-consuming tasks. Let a quality PEO handle all human resources needs from job postings to exit interviews.
  • Business protection: Compliance is one of the most important yet mundane tasks to stay on top of constantly. Be sure any company you partner with is aware of all the rules in your area from federal regulations to local laws.
  • Employee training and development: Proper training can be the difference between a good and a great employee. PEOs can handle online employee training for management, sexual harassment, and industry-specific programs.
  • Customized benefits administration programs: Small businesses often can’t provide the high-level benefits like medical coverage and retirement matching as large corporations. The best professional employer organizations, however, can help smaller organizations offer competitive benefits like 401(K) plans to increase quality candidates for job openings.
  • Recruiting support: Whether you are looking for new recruiting strategies or need simple reference verification and background checking, a PEO can make a great addition to the team.

Is a PEO Right for My Business?

According to a recent study, small businesses that use PEOs grow 9% faster, have 14% percent lower employee turnover and are 50% percent less likely to go out of business than those who do not.

Small businesses that cannot afford to employ a full human resources department can benefit most from hiring a PEO. For a fraction of the cost, PEOs can help small and medium-sized businesses handle HR and staffing tasks.

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.

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 like benefit funding, cooperative technology, and professional organization memberships. The National Association of Professional Employer Organizations (NAPEO) is a great place to start when looking for reputable PEO service providers like TANDIUM in your area of business.

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.