Many articles have been written on what a PEO is and what it can do for you. For those who have not been in the PEO service industry or who have never pursued a PEO before, understanding what a PEO is can be hard enough. Perhaps it is easier to help you understand what a PEO service is not. We want you to fully understand what a PEO service will not do for the small business owner in hopes that we can clear up the ambiguity with this valuable service.
What A PEO Service Will Not Do For Your Business
Tell You Who Works For You:
While a PEO will be very instrumental in helping you manage the employees you already have and will instruct you on how to stay within the HR guidelines or employment laws that exist, they will not be doing the hiring/firing for you.
Some PEOs do provide recruitment services to their clients if they want to pay for it, but they are not making any final hiring decisions or terminations. You still have a say over who works at your company and who does not. If you do have questions about any of these functions and the proper way to go about them, your PEO will be happy to help you with that.
Make Your Benefits Decisions For You:
Most PEO services have a range of offerings that you can include in the benefits packages that you want to offer to your employees. There is choice in what you can take advantage of so donâ€™t panic. You will not be paying for the things you donâ€™t want or that are outside of any budgetary constraints.
Your PEO will work with you to come up with a plan that best suits your needs and growth strategy. They will help you find what works and so you donâ€™t have to go it alone. That is one of the very best benefits of working with a PEO is knowing that you are in this whole HR management thing together.
Become A Partner In Your Business:
PEO services only partner to the extent that you are co-employers of your employees. They are managing payroll, taxes, employment law compliance and other types of HR Functions but the growth strategy, success and other financial functions are up to you, the business owner.
PEOs do not make investments in small businesses. They help them have a more successful workforce by providing the kinds of benefits and payroll services a small business needs in order to be a formidable competitor in the marketplace. If you are not able to meet financial obligations, including payroll, donâ€™t look to your PEO service to bail you out. That is not what a PEO is set up to do. If you need advice on how to grow and manage a business outside of HR and employment issues, you will need to work with a small business advisor, not your PEO.
Knowing If You Are Ready To Work With A PEO
There are certain things to consider if you are going to work with a PEO that you will need to have in place before a PEO will consider working with you. First of all, you will need to understand that there are fees associated with working with a PEO but for the most part, the savings you enjoy by working with a PEO service provider around benefits will still help you save money overall. You are not saving on benefits and payroll just to give it back to the PEO.
Working with a PEO means your employees will need to have the proper tax filings. That means your 1099 employees will now have to be W-9 employees from here on out. Even though some of your employees may initially object or feel uneasy about that, in the end everyone benefits from the proper tax filings. The PEO service you choose will work with you to rectify any IRS documentation that you need corrected.
A PEO broker like PEO Spectrum can help you get all your affairs in order before you contact a PEO to make sure your transition to a PEO is seamless. PEO Spectrum has a readiness checklist that you can fill out so that you are sure that you are prepared before you engage. Ask for yours today.