In the modern business world, the use of PEOs (or professional employer organizations) is becoming much more common. PEOs like the ones in NetPEO’s nationwide network can provide many human resources and accounting services for a fraction of the cost of a permanent, in-house staff. In order to work with a PEO, though, a client company must sign a co-employment arrangement. While preserving the employer status of the business owner, this arrangement designates the PEO as an employer of record who is legally able to perform tasks associated with employment.
Rather than working as a PEO, NetPEO is a brokerage service that matches businesses with appropriate professional employer organizations within our extensive nationwide network. We can help client companies by finding the perfect PEO for their specific needs, taking advantage of the more than 200 years of combined industry experience present in our network.
Co-Employment and the Employer of Record
When a business signs a co-employment agreement with a PEO, the two entities become co-employers of that client company’s employees. While this may seem strange at first glance, it is an arrangement that allows the PEO to provide much-needed services. In this arrangement, the client business owner often is known as the Executive and the PEO is known as the Employer of Record.
Nothing about the Executive’s status changes other than the fact that they no longer have to spend time and energy handling the services that are under the purview of the PEO. They retain control over the direction of their company, have final say in all hiring and firing decisions, and decide which services they want the PEO to handle.
The Employer of Record
In the co-employment relationship, the PEO becomes an employer of record of the client company’s employees. This means that they are able to handle sensitive information like payroll matters and employee benefits package information. Business owners can rest at ease, as the PEO (while technically an employer) is still under the direction of the client company owner and the co-employment relationship can be terminated at any time.
Reasons for Signing a Co-Employment Agreement
According to expert estimates, PEOs now work with roughly 175,000 companies across the nation. In fact, the PEO and HR outsourcing is growing much faster than the overall economy. These statistics suggest that there are numerous benefits to the co-employment arrangement, and the data bears this out.
By having a PEO handle services like payroll, employee benefits, wage garnishments, risk management, and more, business owners can free up their time to focus on growing their company. Instead of being mired in paperwork, clients are able to expand their market share, attract more customers, refine their products, and oversee the day-to-day work of their business.
PEOs also save business owners money in a variety of ways. Outsourcing HR and accounting needs is often much less expensive than hiring an in-house, salaried staff. Additionally, PEOs can provide expert assistance on safety procedures, the handling of federal labor regulation compliance, lowering a company’s risk profile, and more. All of this reduces extraneous costs and saves business owners money.
Attracting Top Talent
Another important service that PEOs can provide is raising the quality of recruitment procedures. Not only do PEOs handle the recruitment process, but simply working with a PEO can increase the likelihood of a business attracting more qualified personnel. This is because, as an employer of record, the PEO can count all of the employees of all of its client companies as its own employees. This gives the PEO a better bargaining position for high-quality employee benefits packages and lowers the individual cost of those benefits by spreading the cost across a wider employee pool.
NetPEO Can Help Businesses Find the Right PEO for Them
There are nearly 1,000 PEOs operating in the United States, so finding the perfect one for any individual business may seem like a daunting task. However, these services are vital for many new and smaller businesses with between five and 100 employees. That’s where NetPEO can help. We work as a PEO brokerage service to pair clients with PEOs from our nationwide network.
The process starts when we create a profile of your company’s specific needs and match those needs with a handful of PEOs who provide those services. You, as the business owner, are presented with these options and can choose the PEO that best suits you. Selecting from five or six PEOs is much easier than selecting from nearly 1,000!
Finally, NetPEO stays with our clients throughout the duration of the co-employment relationship with our networked PEO. We check in regularly to head-off any issues and ensure customer satisfaction, leading to our industry-leading client retention rate of 95% and a 100% client satisfaction rate.
Find an Employer of Record for Your Company Today
To start the process of finding your PEO, get in touch with NetPEO today. Call us at (678) 376-1212 or enter your information on our contact page. Our representatives will speak with you within 48 hours for a FREE, no-obligation consultation on your HR and accounting needs.