If you are considering a professional employer organization but don't know quite how they work, you aren't alone! Many business owners don't understand how PEOs work or even what PEO questions to ask and how they can help you streamline and improve your HR processes.
Here are some questions to ask a PEO to decide if one is right for you.
When you partner with a PEO, you can expect services supporting human resources' administrative tasks. We have the expertise, economy of scale, and resources to help you with overall Human Resources (HR) management, including the following.
PEOs are a comprehensive solution, providing the above services so you can place your focus on the revenue generating parts of your business.
One myth about PEOs is that you lose control over hiring and firing. People often confuse a PEO with a temp agency or employee leasing scheme.
You have complete control over your business. The PEO just provides the services and assistance you need and want and acts as an extension of your business in the HR sphere.
As often as you need! The PEO's staff are always there to answer questions, give advice, and act as a support system for you and your internal HR personnel.
PEOs are experts. Each staff member is well-versed in HR, state and federal compliance, safety, benefits, etc. Look for a PEO who has been around a while and is being run by people with experience. Remember that all these people do is HR, so they have the know-how to run your daily HR tasks.
Most types of small to mid-sized businesses will benefit from a PEO. The common image of the PEO is somebody who works with office staff, but PEOs work with manufacturing companies, construction firms, high-tech, and accounting.
PEOs work with the stuff universal to all businesses and the industry-wide tasks you need so that you can use one regardless of your business.
Another myth about PEOs is that they replace your internal HR team. This could not be further from the truth. Instead, a PEO complements your HR team. They take care of the daily tasks.
This means your HR team is free to do the stuff that requires what the PEO doesn't have; intimate knowledge of your company and goals. Your HR team can focus on strategic functions such as employee development, improving the company culture, designing a new performance review system, etc. They will be free to do the exciting parts of their job. If you don’t have an HR team, you won’t have to hire one when you’ve already partnered with a PEO.
Understandably, your employees may be nervous about the change and even afraid the PEO will be able to fire them. However, the truth is that PEOs only positively impact your employees. They will enjoy better benefits and training and the advantages of HR having the time to support them properly. Your employees will appreciate all the benefits of a PEO, though a PEO is there for the business owner too. If you have concerns about how to properly terminate an employee, a PEO can walk you through those steps and help you avoid a sticky situation or potential lawsuit.
For most companies that use one, the answer is a resounding yes. In fact, survey results recorded 98% of PEO clients would say those who don't use a PEO – should. The typical ROI of using a PEO is 27.2%, higher than any other form of HR outsourcing. Statistics also show that PEO clients experience 19.6% lower turnover and 5% higher growth in terms of revenues. Partnering with a PEO also improves productivity and profitability for most clients (70% reported an uptick in revenue and 66% in profitability).
A PEO also has a lot of intangible benefits, such as improved employee morale.
If you have more questions about what a PEO can do for you, want to know how much a PEO costs and how to choose a PEO, or if you’d like to talk about our services, contact PRO Resources today.