2what is PEO?A professional employer organization (PEO) is a single source provider of integrated services which enable business owners to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation and other strategic services, such as, recruiting, risk/safety management, and training and development.
3how does a PEO work?A PEO covers four essential functions of any company in any business vertical, those four areas are the following:Payroll and Payroll AdministrationMedical Benefits and AdministrationHuman Capital Management and AdministrationWorker’s Compensation and Risk Administration
4how does a PEO work?In any business there are two core functions of that business, the management of the human capital (the employees) and the core focus of the business (whatever it is the company does). When a company engages with a PEO they outsource the key four functions of Payroll, Medical Benefits, Human Capital Management, Worker’s Compensation and Risk Management. This is done through a co-employment relationship, the PEO shares 50% of the responsibility and liability with the client company in regards to the employees. The PEO is responsible for handling the requirements of the IRS, Social Security, Unemployment, Worker’s Comp and Medical Benefits . The PEO becomes the employer of record as it relates to W2s, issuing payroll checks and working with compliance and regulatory matters.
5how a PEO works?A PEO is a quite simply a company that through it’s client companies have a large number of employees. Through the volume of employees the PEO has and it client companies have, the PEO buys insurance and negotiates large group medical rates which are significantly less than the PEO’s client companies could have attained on their own. By pooling different companies across different verticals and with the volume of employees of the client companies, the PEO is able to mitigate risks and negotiate the most advantageous price on insurance coverages. Through it’s pools, the PEO is capable of keeping the costs down and therefore able to provide significant savings.
6the benefits of PEOThe benefits of PEO are endless and many companies that are with a PEO would never leave. The reason is that a PEO reduces so many issues for a company. In addition to eliminating risk and liability, here are some key aspects of PEO that are essential to a business.National Medical Benefit Plans with Top Tier Insurance ProvidersErrors and Omissions CoverageAncillary Benefits – Vision, Dental, Life Insurance, Pet Insurance, WageWorks, STD, LTDState Unemployment Arbitrage – reducing your rate to their effective rateWorker’s Compensation – reduces the costs and offers Pay as you go to free up cash flowHuman Resource Management System with web-based Employee Service CenterRecruiting and Background ScreeningFor small and mid size employers these benefits would never be able to be offered without extensive HR departments and Fortune 500 budgets. PEO enables companies of any size to realize them.
7why use a PEO?PEOs are a great way to streamline human capital management, while being able to place a fixed price on a necessary expense. PEOs are instrumental in helping their client companies attract and retain the upper echelon of talent. Most companies today outsource their payroll, so many are accustomed to outsourcing in one form or another, with the economic downturns realized in the last few years, it’s more important than ever for companies of all sizes to be competitive, while still watching their human capital spend. It’s important to understand that a company that is with a PEO still controls the operations and every facet of their business, however the PEO is there to act as their Human Capital Department. For example a company with a PEO would still hire and fire in the same fashion they do currently, the PEO would only be involved if the client company requested their assistance. For an administrative fee monthly the PEO’s clients have an entire company at their disposal that does nothing but human resources.
8four areas PEO covers PEO Resources Human Payroll & Administration Risk & Worker’s CompensationBenefitsMedical
9who’s a fit for PEO?PEOs are generally a fit for most companies, as with anything there are certain companies that are not a fit. In most cases PEO offerings can be adjusted to fit every form of a company, so keep that in mind. There really are no set standards to what companies will be a fit or not, if you are targeting companies and you think they will be a fit, then let us know and we can determine if peo will work for them.
10next stepsDinsmore / Steele is built around being flexible with our Referral Partners, as well as clients and prospects. If you have a case that you would like to discuss give us a call and we can review it.We have an online submission system ,as well as we do all of the administrative work for you, so either way we can get cases done for you and your clients.Dinsmore / Steele contact information:Dinsmore / Steele(888) (9PEO-ASO) | office(866) | fax|| website