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How does a PEO Change the Hiring Game for a Small to Medium Business?

Professional Employer Organizations (PEOs) tackle some of the hardest tasks facing any business owner, human resources management. While most businesses want hiring and firing control, the hassles of payroll, updating employee handbooks and building successful training programs all require special expertise. When a business owner or manager lacks that expertise, new talent is needed. In-house talent can mean spiraling employee costs that may not add immediate organizational value. PEOs change the conversation.

What is a PEO?

PEOs serve the same function as a fully staffed HR department, but as a third-party provider. Working with a PEO shifts certain operational responsibilities to the vendor, leaving business owners to get on with their core functions. Payroll and all of the management activities that go along with it move to the PEO. Essentially, all of your employees now work for the PEO, but you define their workday. The PEO writes the checks, files the payroll taxes and tracks time off, but all work activities are carried out at your business.

Expand Your HR Offerings With out Increasing Costs

A PEO does a lot more than just handle payroll. Small businesses are among the least likely to offer compensation packages that include things like retirement benefits, but these are the benefits employees want the most. When top qualified candidates have a choice between a compensation package that includes retirement benefits and one that doesn't, they are likely to go with the larger company that can afford a betterBusiness benefits package. PEOs change the game. Almost all, 98 percent, of PEOs offer some type of retirement plan to their clients. Since one of the most cited reasons why small businesses fail to offer employer-sponsored retirement plans is the cost of administration and setup, participation jumps tremendously when these plans are available as part of an existing HR service contract. The PEO rolls the administrative costs into the total service, making it easier for employers to opt in. PEOs also include services including but not limited to:

  • Compliance assistance for HR-related regulations
  • Online training program development, delivery and tracking
  • Building customized employee handbooks
  • Background screening
  • Employee satisfaction surveys
  • Exit interviews

These services can benefit you by offloading complex, time-consuming tasks where a mistake can be very costly, and benefit your employees by helping to build more engagement and job satisfaction.

Retain Your Best Employees, Longer

Retirement benefits do more than just attract new talent. They also help you retain your existing top performers. Employees already invested in a retirement package are often reluctant to leave. Average employee turnover in the United States sits at 42 percent, but companies that work with PEOs enjoy rates as low as 28 percent.

Choose a Certified PEO Partner

Certified Professional Employer Organizations (CPEOs) have certification from the IRS and pass along specific tax benefits to their clients. Propel HR has the honor of being one of the first PEO companies to earn certified status, and the only one headquartered in the Carolinas. CPEO applies nationwide. To get the maximum benefit of working with a PEO and to minimize potential liability, working with a CPEO is a solid choice. CPEOs take on all tax liability along with their payroll management services, so any errors do not pass on to you. When you offload HR responsibilities, it can be with serious peace of mind, as long as your PEO is a CPEO.

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Tony Farago

Tony Farago

As Vice President of Sales for Propel West HR, Tony Farago brings more than 15 years of experience in sales, operations and group insurance. Tony is dedicated to leading the sales efforts and directing company growth initiatives. In addition to serving as Propel West's VP of Sales, Tony has held various leadership positions in sales development with national HR outsourcing companies where he was responsible for managing sales, marketing, and client retention activities. Tony attended Abilene Christian University where he majored in Business Administration.