PEOs level the playing field between Main St & Wall St when recruiting the same pool of talented employees. Historically small businesses have had a hard time competing with the rich benefit programs, retirement options, and growth opportunities found at Fortune 500 firms. Professional Employer Organizations provide a turn-key solution that allows startups and small businesses to attract and retain key employees like never before.
When looking for a great place to work, every employee seeks employment/financial stability, quality health insurance, a safe working environment, and vehicles for retirement savings like a pension or 401(k).
This article specifically focuses on how a PEO addresses each of these concerns, and why employees should be excited to learn their company is looking into a PEO.
Quality, National, Affordable Health Insurance:
What makes PEOs unique from other HR Outsourcing vendors is the concept of co-employment, where a PEO and a client company form an agreement to split the responsibilities of employing a workforce. Co-employment allows a PEO to form a large conglomerate of thousands of small companies for the purpose of purchasing health insurance. This means instead of a 10 person company dealing directly with Aetna or United Healthcare, there is a 100,000 person company dealing with them.
We’ve worked with dozens of small businesses that have literally cut their health insurance costs in half overnight through the use of a PEO. Professional Employer Organizations also provide access to national plans that work great for small companies with employees all over the country.
In addition to getting the most bang for your buck, PEOs make the administration of offering a comprehensive benefit package much easier as they take the lead in insurance enrollments, employee education, and employee-related questions about their benefits.
Simple bucket list of the benefits PEOs offer: Medical, Dental, Vision, Life, Short-Term & Long-Term Disability, HSAs, FSAs, transit checks, pet insurance, employee discount programs and more.
What helps employment security better than working for a thriving, profitable company?
The PEO will reduce the HR overhead costs of a small company through savings on health insurance and other purchases, and this obviously makes a positive impact on the bottom line. PEOs also provide HR services to ensure that a company has all of their HR policies and procedures in order and educated employee on topics such as discrimination and sexual harassment in the workplace. This helps companies stay out of the courtroom, thereby avoiding any catastrophic lawsuits that usually lead to layoffs and employee downsizing.
Safe Working Environment:
Just as co-employment reduces the cost of a PEOs health insurance offering, it also reduces the cost of the PEOs workers compensation insurance. PEOs and client companies share their workers compensation insurance policy, as well as their claims and premium modifiers. This means the PEO has a vested interest in reducing their workers compensation claims, which means reducing accidents in the workplace. PEOs regularly perform safety inspections of an employer’s worksite in order to put best practices in place, and catch violations. Safety posters, ergonomics, fire extinguishers, forklift training are regular services PEOs provide to ensure a safe working environment.
Access to Retirement Options: 401(k):
Most PEOs provide a free option to offer a 401(k) program to employees. This provides an easy way for employees to save for their retirement. Options such as a safe-harbor plans are also available through PEOs, which allows employer to match a certain % of their employee contributions, a strategy that allows highly compensated employees to participate, and very often found at much larger employers.