Signing up with a professional employer organization (PEO) can really help small businesses grow. According to a 2017 study conducted by Laurie Bassie and Dan McMurrer of the National Association of Professional Employer Organizations (NAPEO), small businesses that partnered with a PEO saw twice the median revenue growth over similar businesses that didn’t. More than that, expected median annual revenue was 40% higher for those businesses and were more likely to see improvements with profitability.
If you’re a business owner who has been considering partnering with a PEO, NetPEO is there to make your search much easier. With a national network of PEO partners, NetPEO has helped businesses across the country find a PEO to make running a business simpler. Our brokers are standing by to help you understand how PEOs can help your business’s profitability and find one that will fit your company just right.
Understanding What PEOs Do
There are a variety of services that PEOs can offer your business. Depending on the needs of your company, you can opt for one or multiple of these services.
Payroll and Benefit Administration
One of the more common roles a PEO can help with is in payroll and benefit administration. The PEO will make sure that your employees are paid promptly and correctly. Additionally, your employees may qualify for an improved benefits package at a lower cost, thanks to being counted as an employee of the PEO under your co-employment agreement.
Recruitment and Employee Administration
A PEO can also be used to simplify the hiring process for you. You can authorize the PEO to develop a recruitment strategy to find and retain the best employees for your business. This can include drafting an employee handbook to help new employees in their on-boarding process.
Regulations and Workers’ Compensation Claims
Making sure that your business is complying with state and federal regulations can be difficult, especially while trying to manage the other aspects of your business. Fortunately, your co-employment agreement can mean that your PEO takes on liability for insuring that the business is in good standing with the necessary laws, including taking the lead on following safety standards. The PEO can also be responsible for processing any workers’ compensation claims that may arise.
The Surprisingly Low Costs of a PEO
With all the benefits you could receive for your partnership, you might also be wondering how much it costs to use a PEO. When you sign a co-employment agreement with a PEO, you typically agree to one of two payment structures:
- A fee based on the average cost of payroll, usually between three and 10%
- A flat fee for each employee, ranging from $900 to $1500 per year
Depending on the size of your business and your specific HR needs, the cost of an in-house HR department will easily dwarf these low costs. Not only will you get the help you need, you’ll save money in the process.
PEOs Improve Employee Retention
According to a 2014 study by Bassie and McMurrer, employees are 10 to 14% more likely to remain with an employer that uses a PEO than one that doesn’t. This is a substantial improvement to employee retention that can really boost your company’s profitability. After all, retaining an employee is often significantly more cost effective than recruiting and training a new employee.
How might a PEO accomplish this? According to Massie and McMurrer’s 2017 study, employees at businesses that use a PEO are, on average, happier than employees of other businesses. These employees believe that their management is looking out for their best interests while also maintaining the competitive edge necessary to maintain and grow the business. The employees also report finding better hiring practices, HR policies, and employee training with businesses that have signed up with a PEO
NetPEO Can Help You Find the Right PEO
At NetPEO, we know that your professional relationships are critical to the success of your business. That’s why we help businesses like yours find the right PEO to help it grow. We tailor a list of PEOs from our national network that offer the services your business needs to succeed. Even after you’ve started using a PEO, NetPEO will be there to make sure you remain 100% satisfied with your new partner.
If you’re interested in learning more about the comprehensive services that NetPEO offers to help with your business’s profitability, contact us today. You can reach out to one of our PEO brokers at (678) 376-1212 or by using the form on our website. We’ll conduct an assessment of your business needs at no charge and help you find the perfect fit your needs.
Don’t hesitate – reach out to NetPEO today!