Many businesses use PEOs, or Professional Employer Organizations, to outsource their HR needs instead of using an in-house HR staff. This can save companies money in many different ways, and it is an especially helpful arrangement for smaller or mid-sized businesses with between five and 100 employees.
PEOs save companies money by being cheaper than a full-time in-house staff as well as in other indirect ways. At NetPEO, we work to pair your business with a PEO that can meet your needs and exceed your expectations.
The Cost of a PEO
Some business owners, especially those who own small businesses or businesses that are just starting out, may worry about the cost of using a PEO. However, PEOs cost less than paying salaries for a full-time, in-house HR staff to do the same services. Though each PEO is free to structure its payment plan differently, most PEOs offer two options.
Paying as a Percentage of Overall Payroll
If you opt for this method of payment, you will pay the PEO a small chunk of your overall payroll for each pay period. Usually, the exact percentage is between 3% and 10%.
For some companies, a better option may be to pay the PEO a flat fee per employee, per year. These prices range from $900 to $1500 per employee, per year. While a percentage of overall payroll may be less expensive, using this option allows for more predictability when budgeting.
It is important to keep you company’s structure and budget in mind when searching for an appropriate PEO. Each business will have its own preference regarding how to pay for a PEO. As part of our initial consultation with you, NetPEO can help you choose a PEO with a payment plan that suits your company’s financial situation.
There are innumerable other ways that using a PEO can save your business money. By using their expertise and experience, PEOs can serve you and your employees more efficiently and free up your time to handle more important matters.
Easing the Burden on the Owner
PEOs can handle services such as payroll management and employee administration, including the drafting and enforcement of HR harassment policies. This can free you, the business owner, to pursue the important day-to-day handling of your business, which can help your company grow and thrive.
Preventing Costly Errors
By managing employee safety manuals and training initiatives, PEOs can help to ensure that your company avoids costly problems like Workers’ Compensation claims. Also, having a PEO with years of experience in the industry can help you avoid making mistakes on paperwork that otherwise might lead to lawsuits or the mishandling of finances.
Preventing Compliance Issues
One crucial way that a PEO can use its expertise to save your company money is by ensuring that your business operates in compliance with all federal and local regulations, including business laws and labor laws. Having a PEO by your side to ensure compliance is essential, as mistakes in this area can lead to serious fines, court fees, or lawsuits.
Helping to Retain Employees
In many industries, a major factor of profit loss is high employee turnover rates. By using a PEO, you can provide your employees with better, more efficient services. Additionally, PEOs have a wider pool of employees in their benefits package pool, thanks to the co-employment relationship. This means that PEOs can provide a higher tier of benefits for a lower cost, giving your employees access to the same benefits that they would have at larger corporations. Happier employees often equate to lower turnover rates, which in turn means more savings for you.
The NetPEO Method
At NetPEO, we work as a PEO brokerage service to pair you with a PEO that will meet your company’s specific HR needs. We start by hearing from you and learning about your company’s situation. After we have a profile of your business and its needs, we match you with several PEOs from our nationwide network.
You select the PEO that is right for your company, and then we stay with you throughout the duration of your relationship with that PEO. This helps us to gauge your satisfaction with the services provided to you. Because of our dedication to customer satisfaction, we have an industry-leading 95% client retention rate and 100% client satisfaction on recent surveys.
Start Saving With a PEO Today
Don’t wait to save money for yourself and your business! If you are curious about outsourcing your HR needs to a PEO, call NetPEO at (678) 376-1212 or fill out the form on our contact page. We offer a FREE, no-obligation consultation. If you decide that outsourcing all of your needs is not right for your company at this time, we also allow clients to select specific, individual PEO services on an a la carte basis.