Right after Labor Day of each year, there is an influx of businesses looking for new ways of doing business in the next business year.
One of the main topics of discussion at a lot of companies and non-profit board rooms, is how to handle human resources, payroll, benefits, etc. Thus marks the season of gathering info, proposals, meeting with vendors, to determine the course of action for the next year (or multiple years) of a businesses life cycle.
The time could not be any better for those in the PEO (professional employer organization) industry. Due to the nature of the PEO relationship or co-employment, January 1 of any new year is very important so that businesses are paying federal and state unemployment taxes under the FEIN that they plan to pay for the entire year. Granted, there may be enough savings on benefits and workers compensation insurance for companies to consider changing tax identification numbers mid-year, but the cleanliness and clarity of January 1 makes life a lot simpler for a lot of businesses.
So, through the Fall and into December, companies are gathering data on potential partners for the human resources. Here's to the Silly Season for PEO.
Saturday, September 17, 2011
Friday, September 2, 2011
PEO - Professional Employer Organization: The Great Small Business Equalizer
To compete to retain employees, small business owners need a benefits plan that compares with a larger company.
In order to do that cost effectively, small, and even mid-sized, businesses have been focusing on shared service opportunities like Professional Employer Organizations, or PEO. This model was originally called "employee leasing," however, in the past 20 years, industry leaders have gotten together to formalize a standard definition and operating procedure to be considered a true "PEO" or co-employer.
And the term, "co-employer" is the key to how the model works. By placing current employees under the tax identification of the PEO, the client companies receive immediate economies of scale in order to purchase benefits such as Major Medical, Dental, Vision, 401(k) and HR software.
Additionally, the PEO, as employer-of-record, is legally bound to do business in a manor that is labor law compliant. So small businesses are instantly compliant, with a Fortune 500 benefits plan, and provided back-office support for payroll, benefits administration and risk management. Oftentimes, PEO will assist in recruiting as well.
Now, PEO is not the model for everyone, but with potential savings of up to $1,000 per employee per year, it is worth investigating to see if it fits.
In order to do that cost effectively, small, and even mid-sized, businesses have been focusing on shared service opportunities like Professional Employer Organizations, or PEO. This model was originally called "employee leasing," however, in the past 20 years, industry leaders have gotten together to formalize a standard definition and operating procedure to be considered a true "PEO" or co-employer.
And the term, "co-employer" is the key to how the model works. By placing current employees under the tax identification of the PEO, the client companies receive immediate economies of scale in order to purchase benefits such as Major Medical, Dental, Vision, 401(k) and HR software.
Additionally, the PEO, as employer-of-record, is legally bound to do business in a manor that is labor law compliant. So small businesses are instantly compliant, with a Fortune 500 benefits plan, and provided back-office support for payroll, benefits administration and risk management. Oftentimes, PEO will assist in recruiting as well.
Now, PEO is not the model for everyone, but with potential savings of up to $1,000 per employee per year, it is worth investigating to see if it fits.
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