Small business owners looking to attract and retain employees should consider the benefits they offer. However, improving those benefits can be a strain on the business that can be difficult to manage. The best benefits packages often require businesses to have more employees than the typical small business has.
Small businesses that seek HR outsourcing solutions with a PEO can improve their benefit offerings for employees. Small businesses can do this because they are able to offer comprehensive benefits through their PEO partner.
If you’re considering partnering with a PEO to improve the benefits you can offer, it’s important to remember that not every PEO is the same. Rather than shopping for the right partner on your own, turn to the PEO brokers at NetPEO. We can help you find a PEO that can offer your employees a more comprehensive benefits package. Just call (678) 376-1212 or use the forms on this site to schedule your free initial needs analysis.
Benefits Workers Receive Through a PEO
Many small businesses offer health insurance to their employees, but that can sometimes be the extent of the benefits offered. With a PEO, your business may be able to offer its employees:
- 401(k) options
- Dependent care option
- Wellness incentive programs
- Adoption assistance
- Education reimbursement
- Job counseling
The options that are available through a PEO vary from organization to organization. When you’re shopping for a new PEO partner, make sure you know what benefits they will be able to offer your company prior to signing your co-employment agreement. A PEO broker like the ones at NetPEO can help you find a PEO offering the right set of benefits for your company.
Improving Your Health Insurance Offerings
When you join a PEO, you have the option of retaining your existing health insurance coverage or offering your employees the coverage managed by the PEO. PEOs frequently offer their employees dental and vision coverage on top of the standard health insurance package.
The plans offered by PEOs tend to be similar in quality to those available to employees at Fortune 500 companies. Despite the increase in quality, many employees may find themselves paying less for the health insurance coverage than they did on their previous program. PEOs can offer this type of coverage at a discounted rate because of the co-employment arrangement they have with their clients.
Why Co-employment Improves Health Insurance Benefits
PEOs can offer improved benefits to small businesses due to the economy of scale. Health insurance premiums are calculated through risk pooling. Risk pooling is the calculation insurance companies make to determine they must charge in order to provide coverage for a group of individuals. The size of the pool and the health of the individuals play a large role in determining the costs.
For PEOs, the co-employment structure allows them to claim more workers in their insurance group, lowering the risk and therefore the cost of insurance. The increase in size comes from the PEOs being the “employer of record” for all the employees working for their clients. Your employees are added to the existing pool of insured individuals in the group, spreading the risk for the insurance company, and reducing the costs for everyone.
Benefits for the Employer
While providing comprehensive benefits for your employees is important, the co-employment arrangement has benefits for the business itself. According to research published by the National Association of Professional Employer Organizations (NAPEO), small businesses that sign up for HR outsourcing solutions through a PEO see:
- A reduction in administrative costs per employee
- A better rate of business survival
- Faster growth
- Improved employee retention rates
These benefits come from the improved benefits you offer your employees, the reduction of stress from handing off complicated HR challenges, and the extra time you have to focus on running your business.
Working with a Leading PEO Brokerage
While there are more than 900 PEOs in the U.S., not all PEOs are the same. Each one offers different expertise, different services, and different comprehensive benefits packages. Not all PEOs have experience working in your state or with businesses in your industry. Getting the right PEO can be critical to improving your company.
With NetPEO, the search for a new PEO is made easy. When you call (678) 376-1212, our PEO brokers get to understand the needs of your company. We work with you to get the services you need through our national network of providers. No matter your HR outsourcing needs, our PEO brokers can help.