Many business owners use the services of a Professional Employer Organization (PEO) as a way to outsource their HR needs and run more efficiently. Of course, in any discussion regarding business transactions, a common question is how much the services of PEO costs. When using PEOs, most companies actually save money in the long run because they do not have to hire an in-house HR team for the work.
There are two common ways that PEOs may elect to charge business owners for their services:
- A flat fee calculated per employee, per year.
- A fee calculated as a percentage of the company’s overall payroll per year.
The flat fee is normally between $900 and $1,500 per employee each year, depending on the PEO in question. If the business owner elects to be charged as a percentage of the company’s overall payroll, PEOs charge about 3-10% on average.
It is not uncommon for PEOs to offer either option to customers based on the specifics of each business owner’s individual service needs and budgeting requirements. With access to NetPEO’s nationwide network of PEOs, you can choose between PEOs according to your exact specifications. Negotiation is always a possibility, and NetPEO works with clients to match them with PEOs that meet their budgets.
What Are You Paying For?
PEOs offer a variety of services to business owners. At NetPEO, our partner PEOs are available for any of the following needs:
- Handling of employee benefits
- Recruitment of new hires
- Employee administration (such as handbooks)
- Federal regulation compliance
- Handling of Workers’ Compensation claims
- Payroll administration
This is by no means an exhaustive list, but it goes a long way toward showing the variety of services provided by PEOs. Many business owners find that using a PEO frees up their time to focus on the meatier matters of business management.
Through NetPEO, you can find PEOs to do the work of an entire HR division or hire PEOs for individual tasks a la carte. While the full service is recommended to receive the full benefit of a PEO, we also provide that added flexibility to ensure that we meet all of our clients’ business needs.
Co-Employment and PEOs
An additional benefit of using a PEO is co-employment. This is a unique relationship that means that the PEO will take on some of the responsibilities and risks of being an employer, which lets the PEO handle important tasks like payroll and employee benefit packages.
Since the employee benefit packages go through the PEO rather than you, the sole business owner, the benefits are in a larger pool and are often much better than individual owners are able to provide on their own. In other words, using a PEO gives your employees the benefits of larger companies.
When employees are given better benefits, they tend to be much happier. And when they are happy, they tend not to leave their position. This is especially important for small businesses, which can suffer greatly from high rates of employee turnover. By using a PEO, companies can reduce their turnover rate by providing employees a welcoming environment with better pay and benefits.
What if You Are Unhappy With a PEO?
Unlike some other companies, NetPEO is a broker that stays with its clients throughout the relationship between them and our partner PEOs. NetPEO first matches a business owner with several PEOs that fit their needs. The business owner can choose which PEO to hire, signing a Client Service Agreement stipulating the details of their relationship. After this, NetPEO stays in contact via regular check-ups to gauge the customer’s satisfaction. This has led to two astonishing facts in NetPEO’s favor:
- NetPEO has the highest client retention rate in the industry, at 95%.
- 100%of NetPEO clients rated our services either satisfactory or extremely satisfactory in recent surveys.
Find Your PEO Today
Using a PEO to outsource your HR needs is one clear way to lower your business operation costs. It is often cheaper than hiring an in-house staff to handle the work. To receive a quote today for the services your business needs, fill out the form on our contact page or contact us today at (678) 376-1212.