Florida Professional Employer Organization (PEO) companies comprise about 14% of the industry, with close to 50 PEOs across the state. Florida, along with Texas, has the most PEOs in the nation. PEOs help their clients manage their businesses more effectively, avoid compliance pitfalls to create key benefits for the business. This also frees up time for business owners, allowing them to focus on things that are core to the business, such as operations and strategy.
A recent PEO study in Florida Trend Magazine shows:
- There are approximately 1,000 PEOs nationwide.
- The industry’s gross revenue is between $136 billion and $156 billion.
- PEOs have grown 15% to 25% in recent years.
Florida PEOs Relieve Administrative Burdens
Health benefits, taxes and regulation, which are some of the issues PEOs help their clients address, are consistently reported as the top concerns of business owners. When business owners partner with a PEO, the PEO becomes a co-employer and is responsible for much of the administrative burden inherent in the employer role. Originally, PEOs were known as employee leasing companies. Today, they handle much more including the following:
- Payroll services
- Payroll tax payments
- Regulatory paperwork
- Human resources support
- Workers’ compensation insurance
- Unemployment insurance
- Employee benefit packages that include 401(k) plans
PEOs also offer a broad array of guidance on topics like workplace diversity, employee retention and federal, state and local employment laws.
Florida PEOs Save Clients Money and Time
Even basic HR functions can be time-consuming, distracting and error-prone. Florida PEOs save clients time by:
- Helping process employee paperwork and creating policies
- Explaining employment laws to avoid potentially time-consuming litigation
- Processing complex payrolls
- Handling wage garnishments, tax withholding and filing
- Offering technology tools
- Allowing clients to bypass annual workers’ compensation insurance audits
- Managing workers’ compensation insurance claims
- Providing support to injured workers
- Processing OSHA reports
- Offering a variety of employee benefit packages
- Administering employee benefits
Employers often find that partnering with a PEO costs less than doing things alone or hiring the staff needed to cover all the bases. PEOs save clients money by:
- Providing guidance on employment practices, compliance and procedures to help clients avoid costly lawsuits
- Processing payroll accurately and on time to help clients avoid fees associated with payroll mistakes
- Filing state and federal taxes to eliminate the risk of late fees or penalties
- Offering low rates and flexible payment plans with no big down payments on workers’ compensation insurance
- Managing workers’ compensation claim costs by reviewing bills to maximize savings opportunities
- Mitigating safety risk by helping clients identify hazards on worksites and creating safety programs
Florida PEOs Offer Cost-Effective Benefits Plans
Because PEOs spread costs across a larger pool of employees, businesses can more cost effectively offer employee benefits such as: 401(k), health, dental, life and dependent care. Employers can offer retirement savings with no out-of-pocket costs or elect to match a portion of employee contributions.
2018 Nationwide PEO Trends
- More large employers are considering PEOs, which historically served mostly small and medium-sized businesses.
- PEO salaries and hiring are up.
- The average PEO-client relationship is eight to 12 years.
- The PEO industry is expected to experience consistent growth over the next five years.
FrankCrum, a Florida PEO, serves businesses nationwide. Call 1-800-277-1620 for a free consultation.