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What is a PEO and Why Do I Need One?

Jaime Moore
by Jaime Moore on January 5, 2017

business-professionals-sharing-ideas.jpgIf you’re running a business, you may or may not have heard of a PEO. A professional employer organization offers workers’ comp insurance, payroll, benefits and HR assistance. Not only can it save you time and money to work with a PEO, you can also avoid costly mistakes.

So how does it work? PEOs assume some of the roles and responsibilities of being an employer and they concentrate on the HR-related things you either don’t have trained staff to handle, or don’t have time to do. It doesn’t matter whether you have one employee or hundreds, PEOs can leverage people, processes, technology and insurance products to make HR a breeze. Here are the top benefits PEOs offer and how to determine whether your company should partner with one.

1. Save Time and Money

Administrative work like payroll and HR can take up a lot of your time and resources. It can be challenging to be an HR expert when you went into business to do other things. That’s where a PEO comes into play. Partnering with a PEO means more than just outsourcing payroll; the PEO’s extensive team can take care of the vast majority your HR needs. This includes hundreds of services like:

  • Serving as your complete HR department or supplemental HR team
  • Processing unemployment claims
  • Preparing a comprehensive employee handbook or reviewing an existing one
  • Training on important HR topics
  • Providing forms related to HR functions
  • Providing expert guidance on wage payment and labor laws to assist with your compliance
  • Handling complex payrolls (multi-state, certified, job costing, multiple pay rates, holiday and overtime pay)

In addition, PEOs offer reliable guidance from certified advisers. These experts can help with everything from documentation to discrimination issues. The HR assistance is more than just convenient; it can minimize costly mistakes that can put your business at risk for legal action.

2. Retain Good Talent

When it comes to retaining good employees, having a solid foundation for HR is important. That starts with having good employment practices and policies that keep everything fair and safe. PEOs help business owners create those guidelines and publish them in an employee handbook. Furthermore, almost every employee considers having great benefits a top priority. This can include paid time off, holiday pay, health benefits and retirement savings options, just to name a few. PEOs help clients establish robust yet affordable benefits options. And when it comes to health insurance, PEOs assist in selecting health plans, then support clients with the necessary tools to administer them. They can even help you avoid the employer mandate tax penalty by showing you a range of compliant plan options. Most PEOs can offer lower group rates on health plans. All of these benefits offer your employees a sense of security, meaning they’ll stick with you longer.

3. Reduce Risk and Stay Compliant

PEOs can help with safety plans and procedures by offering training and resources specific to your industry. Part of that means creating a safety manual to help reduce workplace accidents. PEOs also offer return-to-work programs and conduct fraud investigations when necessary. The PEO can also help you make sure your business is OSHA-compliant. Some PEOs like FrankCrum will even conduct safety audits of your jobsite and complete your OSHA report every year. As part of the partnership, there is an analysis of claims and losses annually.

Partnering with a PEO allows you to eliminate things from your plate and focus on growing your business. Do you need one? If your goal is to focus on your customers and the future of your business, then probably. With a PEO, you can work smarter and achieve more. At FrankCrum, our goal is to reduce your workload, improve the way your HR is handled, and lower your costs at the same time. The best part is you’ll have experts doing the work for you. FrankCrum is 100% committed to providing you and your staff with over 100 comprehensive employer services.




Jaime Moore
Jaime Moore

Jaime Moore is a Brand Journalist for FrankCrum. She has more than 10 years of experience in journalism, writing and communications. Her focus is on writing about the challenges small businesses face. In her spare time, Jaime enjoys vacationing in the mountains, watching movies and spending time with her children.