What Is a PEO–And How Can It Help Your Business?

What Is a PEO–And How Can It Help Your Business?

5 minute read
Cápita Works
Nov 02, 2022
Cápita Works
Nov 02, 2022

A PEO can take on the role of an employee’s primary human resources department while also providing them with services, benefits, and training. As a result, your team will spend less time worrying about insurance plans and other HR issues and more time focusing on growing your business.

This type of organization can help your business by handling administrative tasks so you can focus on the core aspects of your business. Here’s everything you need to know about PEOs.  

What is a Professional Employee Organization? 

A professional employee organization (PEO) is a business services company that provides human resources and benefits administration services to small and mid-size businesses.

A PEO replaces your HR department and takes responsibility for all HR activities related to employees, such as hiring, payroll, benefits, compliance, and records management. After all, you can’t expect your marketing team to handle hiring.

Professional Employee Organizations are business partners that help you run your company more efficiently by offloading the administrative burdens of HR.

There are several advantages to partnering with a PEO.

  1. First, they have a lot of experience in HR administration and know the best practices for hiring, managing employees, and providing benefits. So, they can help you avoid common mistakes that can cost your business money and time.   
  2. Second, they have access to an extensive network of employees and can help you find the right talent for your company. 
  3. Third, they handle all the administrative tasks that take up so much of your time so you can focus on your core business. 
  4. And fourth, they handle the administrative tasks that are often ignored by small business owners, such as compliance with state and federal rules, providing benefits, managing payroll, and providing employees with training. 

PEO Services

A PEO can handle most administrative tasks related to managing employees and providing benefits. After all, their business is doing those things for other companies.  

The primary HR services provided by a PEO include hiring, payroll, benefits, and compliance. The administrative tasks related to these areas include: 

  • Screening candidates for new employees.
  • Processing payroll for current employees.
  • Providing help to employees.
  • Managing employee records. 

A PEO can help you find the right talent for your company by screening candidates, conducting psychological tests, administering assessments, and managing the onboarding process. They’ll also manage your employees’ payroll and ensure they are paid according to federal and state regulations.

A PEO can also provide your employees with health, dental, vision, life, and disability insurance, paid time off, and other voluntary benefits.

PEO benefits for small businesses

If you are a small business owner or the HR manager for a small company, you know that hiring and managing employees is difficult. As your company grows, you have more tasks to juggle.   

You must hire new employees, manage their onboarding process, provide benefits, and set up compliance services. That’s a lot to handle when you’re also trying to run your business. A PEO can help you with all those administrative tasks to focus on your core business.

Let’s take a closer look at the benefits of using a PEO.

  • A PEO can help you hire employees by replacing your HR department, providing access to an extensive talent network, and helping you find suitable candidates for your company.  
  • They can also help you onboard employees by managing the administrative tasks so you can focus on your core business.  
  • Nearshoring with a PEO can let you access talent in your same time zone while saving up to 70% on salaries (while providing full benefits).  
  •  Finally, a PEO can provide compliance services that help you stay compliant with state and federal regulations to focus on your core business. 

Drawbacks of using a PEO

There are a few downsides to using a PEO.  

  1. First, you must consider the time basis you need your employees for. PEOs can provide you with part-time or full-time employees. Nonetheless, you may not need to go through a five-step recruitment process if you need an employee on a short-time basis.
  2. Second, if you outsource services, you may get employees working for different clients simultaneously. To avoid this, make sure to insource instead of outsourcing.
  3. Third, hiring for a low price across the globe can come with a high price in communication. Communicating with different time zones and language and cultural barriers can be challenging.

How to find the right PEO for your business

If you decide a PEO is right for your business, you must find the right one. Some questions to ask when evaluating PEOs are:

  • What services do they offer?
  • How much do their services cost?
  • Are their services something that benefits your company?
  • Do they have experience working with other companies like yours?
  • What’s their customer service like?   

At Cápita Works, we’re focused on providing solutions for small to mid-size businesses. With the help of our nearshore virtual assistants, you can delegate tasks and focus on growing your business -while saving up to 70% on salaries. On the other hand, if you need help with marketing, our Shared Services Center has a team of marketing specialists offered at packages that fit your business’s needs - with no strings attached.  

A PEO can help your business by handling administrative tasks so you can focus on growing your business. A PEO can help you hire employees by replacing your HR department, providing access to an extensive talent network, and helping you find suitable candidates for your company. They can also help you onboard employees, by managing administrative tasks so you can focus on your core business.

For any further doubts or information, you can contact us at info@cápitaworks.com.  

Cápita Works
Nov 02, 2022

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