How Professional Employer Organizations (PEO’s) can help small to medium-sized, and even some larger businesses, stay competitive and lean without getting bogged down in the paperwork.
[sws_pullquote_left]The PEO should become a natural, seamless extension of the company that can streamline the burden of managing employees and risk. [/sws_pullquote_left] There comes a time in the life of every successful business owner, of every budding artist and start-up genius, entrepreneur and proprietor, when their product, their innovation, their next big thing becomes secondary to a pile of crushing paperwork. Passion and vision become clouded by a fog of complex legal and financial obligations that require intense scrutiny, meticulous bookkeeping, and ultimately, a lot of time. Considerations such as payroll, employee benefits, human resources, recruiting, and risk management often require the expertise of full-time specialists trained in those fields.
However, many business owners simply do not have the time or resources to simultaneously and effectively run their businesses while also performing HR duties, minimizing risks, and taking good care of their employees. For those that went into business for themselves, these incredibly crucial, yet complex and time consuming administrative tasks, can be an unwelcome distraction from the real tasks at hand, namely the running of a successful business.
PEO’s For CEO’s
This is where outsourcing administrative responsibilities through a Professional Employer Organization can be highly beneficial. A PEO is a firm that provides a service in which a client firm, the business owner buried in paperwork in this case, can outsource a variety of administrative duties including but limited to payroll, employee benefits, workers’ compensation, risk management, and even hiring and training.
The PEO, functioning much like a full-service HR department for hire, takes on these more mundane obligations freeing up the owner to focus on running his or her venture with all necessary attention. In turn, the PEO can often provide quality services to employees, such as workers’ compensation and insurance coverage, at lower prices than what is available to the average business owner. All parties benefit.
The Right PEO Is All About Fit
Relationships with PEO’s are close by their very nature since the PEO is, in effect, becoming a business partner and a co-employer. As such, nothing is more important for a growing company seeking employee management solutions than to find the right PEO for them.
That means finding a PEO, also known as an Employee Leasing Company, which provides the right set of services, within the right budget, and more importantly, in a way that works with the culture and expectations of the client company. The PEO should become a natural, seamless extension of the company that can streamline the burden of managing employees and risk. In other words, the PEO and the client company should fit hand-in-glove and be one in purpose and direction. Where the hands directs, the glove protects – in this case through risk management services and HR solutions. Unfortunately, finding the right fit is not always an easy endeavor.
Some basic rules of thumb, pun intended, include checking to see if the PEO in consideration has a demonstrated history of adherence to the industry’s professional practice standards. Is the PEO certified? Are they independently accredited by ESAC? Are the PEO’s financial statements being independently audited by a CPA? Alternatively, a PEO consulting firm can also help prospective clients determine what they really need and connect with the right PEO’s.
You Direct, They Protect
Ultimately, most people do not start their own businesses with the hope of being bogged down with handling crucial but mundane administrative tasks such as managing employee insurance coverage and minimizing liability. In fact, most people went into business for themselves because they had a dream, a passion, or a great idea worth pursuing. PEO’s can streamline essential administrative duties and, in return, offer CEO’s and business owners precious commodities: time and peace of mind.