In this review, we discuss what PEOs are, the benefits they offer for small to mid-sized businesses, and other important information you should know about PEOs as a business owner. This should help you make an informed decision as to whether or not working with a PEO is the right decision for you.
A professional employer organization, or PEO, provides outsourced human resource services to small to mid-sized businesses. This helps small businesses mitigate their financial risk, comply with employment-related laws and regulations, and helps ensure tax obligations are fulfilled in the most efficient way possible (among other benefits).
5 Facts About PEOs for Blue Collar Businesses
PEOs work as brokers to ensure their clients (small to midsize businesses) achieve the most comprehensive coverage and HR assistance possible. Below are five important things to know about PEOs if you are the owner of a blue collar business.
In simplest terms, PEOs make life easy for small to midsize companies. This is especially the case for companies in high-risk industries. Some of the more common services a PEO offers for their clients are:
- Workers’ compensation
- Payroll services
- Employee leasing
- Health insurance (and other benefits)
- Union affiliation services
- Certification services
The services vary based on the PEO you choose. Also, most firms personalize your plan to ensure you are well-protected according to your specific company needs and coverage preferences.
The primary purpose of a policy with a PEO is to mitigate overall risk for small businesses. This means small to midsize business owners can gain peace of mind and more financial certainty as they know they are adequately covered if an incident were to occur for which the company were liable (i.e. workplace injury). Additionally, since PEOs serve as brokers who find their clients the best policy deals, most companies find that they save money by working directly with an experienced and reputable PEO.
According to a recent study by noted economists Laurie Bassi and Dan McMurrer, businesses that use PEOs grow 7 to 9 percent faster than those that do not. Additionally, according to the same study, PEOs who work with a PEO cut the chances of closing in half. If you have ambitions to maximize your company’s profitability, then working with a PEO is a great choice.
Employee turnover rates are 10 to 14 percent lower among small to midsize companies who work with a PEO. This is largely because employee’s enjoy the benefits they know they will receive, whereas there is a higher risk of not being adequately covered with companies who do not utilize a PEO.
PEOs are particularly beneficial for high-risk industries, such as construction, manufacturing, machinery, and electrical industries. These industries typically have specialized coverage needs. For instance, a PEO has an in-depth understanding of the The Occupational Safety and Health Act (OSHA). Rather than companies having to navigate the complexities with this act themselves, they can instead rely upon the expertise of their PEO to do so for them.
If you are interested in working with a qualified and experienced PEO company or have additional questions about your needs, then contact our team today.
We can provide you with a free quote based on your coverage needs, along with addressing any initial questions or concerns you may have.