PEOs Remove the HR Burden

You’ve dreamed of running your own successful business and have worked hard to finally achieve it.  However, as most small business owners would agree, payroll, human resources and risk management were never a part of the plan.  As a result, you may have difficulty keeping your employees happy, or rather, just keeping your employees at all!  If HR issues aren’t your thing, then you might seriously think about employee leasing, utilizing a professional employer organization to outsource your human resources. 

It may be somewhat of a stretch to compare leasing your employees to leasing your new car, yet surprisingly, the decision is fundamentally similar.  Basically a leasing PEO hires your current employees and takes over the responsibilities of payroll, workers compensation, taxes, employee benefits and so on.  So, even though there is no change in the internal operations within your company, about ninety percent of the administrative burden is lifted from your shoulders.

Essentially, a PEO takes on the role of your human resources department and simplifies the whole process for you - you are usually charged a fixed percentage of your payroll every time payroll runs for the PEO services. As a small business owner, you can wash your hands of most of the HR issues and get back to what you love about owning your business: making a profit.  

Today, employee leasing companies are more effective and beneficial than ever.  Not only do they provide a multitude of services to the firm or client, but they can often be very favorable to the employees.  Seeing as PEOs are often much larger companies than your own, they are able to provide the employees with greater benefits and cheaper insurance.  For small businesses especially, a PEO or employee leasing company can be advantageous to both the employer and the employee for a variety of different reasons, including the following: 

  • More diverse health insurance benefits for employees
  • Enhanced payroll services for the employers because of outsourcing payroll
  • Risk management support
  • Employee training and development
  • Employee discount programs   

Of course, a leasing PEO may not be the best decision for all business owners. If you do decide to utilize a PEO, the PEO company then holds the right to hire and fire employees, a burden for many business owners.  For others, however, this is both a power and a privilege which they enjoy.  Although you, as the manager or owner, still supervise and direct your employees on a daily operational basis, the employment of your workers ultimately rests in the hands of the PEO.  When considering hiring a professional employer organization, you must decide if you would like or be willing to have a company take on the responsibility of hiring and firing employees.  

Just like leasing a car or home, leasing your employees is a very big decision for your company and several factors must be considered.  If your employees are receiving good benefits, are happy with their job, and have no intention of leaving, a PEO may be unnecessary and may only incur more costs and cause greater harm than it will provide benefits.  However, if you find yourself in the opposite situation, a leasing PEO can put your company back on track and in the black.
 
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