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5 Benefits of Using a PEO for Your Small Business

5 Benefits of Using a PEO for Your Small Business

Imagine if you didn’t have to deal with the headache of routine administrative HR tasks and could focus on your greater business goals. Most business owners, especially small business owners, don’t have the capacity to handle the time and effort required to manage all aspects of human resources and payroll. With the help of a professional employer organization (PEO), you can eliminate the burden of HR, remain compliant, secure affordable worker’s compensation and health insurance coverage, and run your business operations at maximum efficiency. 

What is a PEO? 


As a refresher, a PEO is an organization that partners with your company to take on HR responsibilities such as payroll processing, compliance, full employee lifecycle management, and more.  


5 Benefits of Using a PEO for Your Small Business 


  1. Secure Affordable Health Insurance

One of the potential benefits of some PEO’s is the ability to provide your business with top-notch employee benefits packages. A few of these benefits include healthcare, dental and vision plans, and life and disability benefits. The PEO also assists with the administrative tasks of enrolling employees in their benefits packages and managing carriers, so you can focus on growing your business. Traditionally, companies would need to fully outsource their employee benefits to their PEO. However, some modern PEOs allow employers to keep their benefits programs in-house while still profiting from the many benefits a PEO can provide.


  1. Simplify Your Payroll Process

Payroll can feel complicated, especially if you have employees that are on different payroll classifications such as hourly, salary, commission, etc. A PEO can help to provide a dedicated payroll manager for employers who provide expertise, protection from fraud, and help decrease overhead costs. 


  1. Give You Peace of Mind About Your HR Compliance 

Human resource laws are ever-changing and complex. It’s important to have peace of mind that your small business is remaining compliant. A PEO will take the burden of compliance off of your shoulders and keep up with changing regulations. 


  1. Employee Retention & Company Growth

According to the National Association of Professional Employer Organizations (NAPEO), businesses that use a PEO have higher employee satisfaction and lower employee turnover. 

NAPEO’s NAPEO 2019 Study found that “the average cost savings from using a PEO is $1,775 per year per employee, while the average PEO cost per employee is $1,395, yielding an annual ROI of 27.2%.” The study also found companies that utilize a PEO grow faster and are much more likely to stay in business.


  1. Aid With Workers’ Compensation 

Lastly, insurance claims are time-consuming and tedious. A PEO typically will handle your worker’s compensation coverage and claims on your business’s behalf and in many cases save you money. They also have the knowledge to help you navigate best practices for risk management in the workplace. 


For more information on the benefits of a PEO read a couple of our articles below: 

Benefits of Using a PEO 

 Benefits of a PEO During a Pandemic 


Have additional questions? Reach out to our team! 

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