Running a business requires balancing all factors of production. An important part of this process is the capital needed to run business operations like employee benefits.
Employee benefits are an essential business expense because better benefits attract top talent to your team and helps to retain employees. Lastly, non-compliance with involuntary benefits can lead to fees, fines, and possibly employee lawsuits. But you don’t want it to come to that!
On the surface, employee benefits may seem expensive. However, it doesn’t have to be because there are affordable options out there. That being said, this is where outsourcing HR functions to a Professional Employer Organization (PEO) comes to the rescue.
What is a PEO?
What is a PEO, you ask? A PEO is an organization that enters into a co-employment agreement with an employer. PEOs lease employees to the employer, thereby co-sharing employee-related responsibilities.
Overall, this is an excellent strategy for employers to outsource their human resource needs. In turn, co-employment helps employers save various costs, especially human resource related. How does co-employment works? You’re probably asking.
Below are the general dynamics of co-employment you should know.
- Not losing business control: PEOs grant employers control of their business, despite outsourcing all or some human resource functions. As a business owner, you retain the power to hire and fire employees as you deem fit.
- Remitting taxes and other employee benefits: PEOs enable employers to remit employee taxes while maximizing employee benefits at affordable rates.
- Doesn’t replace your existing in-house HR: PEOs are versatile and offer the opportunity to outsource some or all of your human resource functions. So, you can only outsource functions that you’re comfortable with.
Which Benefits are more Affordable?
We’ve already hinted at how PEOs make employee benefits affordable and you’re probably wondering which benefits we’re referring to. Sit back as we delve into ways you can experience affordable employee benefits through PEOs.
1. Worker’s Compensation Insurance
The law requires employers to ensure there’s a safe work environment. Nonetheless, accidents are inevitable, and they occur from time to time. Workers’ compensation insurance comes in handy to compensate workers after an accident. Collaborating with a PEO helps you negotiate fair worker’s compensation insurance deals.
2. Safety Audit and Training
Safety audits and training are an important part of employee personal development. Employers are obliged to equip their employees with the necessary safety skills required at the workplace. The problem is, it can be pretty costly to train the team. However, with the help of a PEO, this shouldn’t be a hurdle.
3. Access experience modifier
Experience modification is an incredible way to guarantee your employees’ safety at the workplace and compensating them in case of an accident. PEOs help you access better experience modification compensation deals for your employees without the hassle.
4. Set up a return-to-work program
Setting up a return to work program for your employees can be such a hurdle. It’s time-consuming and requires a lot of resources. If you’re doing it on your own, it can take a toll on you. Outsourcing your HR functions to a PEO helps you take this responsibility off your table.
5. Retirement Plans
Sooner or later, you have to let your employees go when they hit the retirement age. As the employer, you know you should work out an exit strategy like a retirement plan. The kicker is that they can be pretty expensive. The good news is, a PEO can help you offer the best retirement plans like 401 (k).
6. Multi-Employer Plans
Teaming up with like-minded businesses in the industry and facing different boards of trustees to discuss pension plans for your employees can be costly. PEOs step in to help negotiate better multi-employer pension plans for your team of employees without costing you a lot of money.
7. Reduced Fees
The cost of managing employees can be high based on all that come into play, such as pension payments, training, and bonuses. Most of these are involuntary, so you have to comply whether you like it or not. Outsourcing HR functions to PEOs can help reduce these fees.
Employee health is important and should be given priority. Sadly, it can also be expensive to handle both their physical and mental health needs. Outsourcing to a PEO is a great way to make healthcare benefits affordable.
9. Set up a wellness program
Improving and maintaining notch employee health and wellness can be expensive because you have to set up a wellness program. Outsourcing to a PEO can help you achieve this goal at a fraction of the cost.
10. Access master benefit plan
A PEO enables employers to access master health benefit plans for their employees at affordable rates. Master benefits plans are awesome because they offer custom health insurance policies.
Above are the affordable employee benefits you get when you outsource HR functions to a PEO. In addition, below is a quick rundown of other PEO benefits.
- Lower overhead.
- It costs a fraction of the amount needed to pay salary and benefits to another HR employee, especially HR experts.
- PEOs staff experts in different areas of HR.
- Full HR compliance.
- Avoid fines, fees, and possible employee lawsuits.
- Fewer administrative burdens.
- Employees can focus on core business priorities.
- In-house HR can focus on improving company culture.
- It helps make a company an “employer of choice.”
- Reduces the time and cost of hiring since potential employees are naturally attracted to you.
- The only HR outsourcing solution with a positive average ROI.
So, if you’d like to experience these and many more PEO partnership benefits, don’t hesitate to get in touch with Zamp HR here to get started.