For owners of small to mid-size businesses, dealing with the minutiae of running your business can take up great deal of time. Chances are you started your business because you had a terrific service or product to offer others. Alas, being an entrepreneur requires much more than that. There is payroll to think about, health insurance to provide, retirement accounts to offer, workers compensation Insurance that must be put in place, and so on. And of course, all of those items come with a price tag, some of which can be pretty hefty. So if you’re ever found yourself wishing you could just delegate all of those time consuming details to someone else, you’re not alone. And the good news is that companies exist which do provide precisely these types of service, all the while eliminating your liability and often saving you money.
Professional employer organizations (PEOs) have been around for many years, yet many small business owners remain in the dark about their existence. PEOs enables small to mid-sized businesses to outsource the management of human resources, including payroll, employee benefits, and workers’ compensation. That obviously frees up your time to focus on other aspects of your business.
In a sense, PEOs act as co-employers (but don’t worry, you’re not signing over even a fraction of a percentage of your business). They merely assume the majority of responsibility and liability in areas including risk management, HR management, payroll and tax compliance. Some PEOs will even share employment law compliance responsibilities with you. As the owner of the business you are then able to do what you do best, which is focus on production, sales or service to your clients.
For HR services PEOs offer a variety of services, which may help you to increase employee satisfaction (and therefore productivity). Keep in mind that employees expect-at minimum-financial security, quality health insurance, a safe working environment, and the ability to save for the future. All of these needs must be met by someone. If you don’t have a full time HR department, or if you need to streamline your HR department, many PEOs offer technologically based infrastructure and/or service platforms for an upfront cost.
In terms of providing benefits to your employees, a PEO may be able to offer small to mid-sized business owners with the opportunity to provide benefits on par with those that a talented employee may be offered at a larger company. These can include a 401(k), life insurance, disability insurance, discount plans, a flexible spending plan and more.
But, what may be even more attractive about working with a PEO is the opportunity to save money. Indeed, for companies with as few as 20 employees (but up to several hundred) a PEO may offer substantial savings on your health insurance plans, for example. This is due to a collective bargaining power that PEOs have with insurance companies. Because PEOs work with many businesses, they handle health insurance for many, many employees. To put it another way, the PEO’s economy of scale may benefit your bottom line (think shopping at Costco-vs-Other retailers). In many cases, the savings are substantial enough that they offset the cost of initially partnering with a PEO.
For small and mid-sized businesses, it is worth taking a look at PEOs to see if your business may benefit from this type of partnership. As with all services, there is no one-size-fits-all model, so you’ll need to talk with a trusted insurance broker to determine if working with a Professional Employer Organization makes sense for your business. If working with a PEO doesn’t save you time and money, there is obviously no reason to make a change. But it’s definitely worth your time to investigate the opportunity. Feel free to give Lifeline Employee Benefits a call at 818-774-1003, and ask to have us run the numbers for your business.
Steven Driss is President of Lifeline Employee Benefits in Tarzana, Ca. Lifeline Employee Benefits was established in 1985 to help individuals and small businesses identify and purchase affordable health insurance, life, disability and other group insurance. Steven also serves as an insurance expert/guest lecturer at UCLA and CSUN. For additional information visit www.health-quotes.net, contact Steven directly at 818-774-1003 or via email at email@example.com