It’s tough to navigate the best PEO Companies (also known as Professional Employer Organizations) on your own as the PEO industry has been consolidating HR and benefit services for roughly 3 decades. We understand that handling HR for your company can be an exhausting task, one which distracts you from focusing on running your business or organization. This is most likely why you are considering a PEO company to handle those tasks for you. No matter how unique your organization or business is, there will be a PEO service that fits your needs.
PEO Companies – The 3 Types
Here are the most common types of Professional Employer Organization Services. Depending on the size or your organziation will determine which type of PEO is best to suit your needs. There are 3 types of PEO companies on the market today which are summarized below. Which is the best for your business’s needs? If you are unsure as to which PEO suits you best fill out the quote form on this page to get matched to the best PEO for you.
Under 20 Employees – Are you under 20 employees and wondering if a PEO is even the right decision? This is the common thought process for those that have not implemented a PEO into a business. There are multiple PEO’s that focus on this 1 – 20 employee company range. These PEO’s have built their service team and technology to service small companies in ways they should be serviced and priced from an administration cost.
“The Sweet Spot”
20 – 99 Employees – Company process, culture and government mandated compliance starts to change as you hit the 25, 50 and 100 employee mark. PEO’s help you navigate employee compliance and growing pains through employee lifecycles. At this size cost savings becomes very evident when moving onto a PEO to consolidate all tactical HR functions. For example, your EPLI insurance alone may cost you $15k annually and this is something that is free for your organization when you join a PEO
100 – 800 Employees –You are not alone in this state compliance and payroll battle when you choose to partner with a PEO. At this size, benefit premiums can also sky rocket out of control. On top of that, you could have an HR department of 2-7 employees. We find that those HR staff members should be high level strategic thinkers that focus on culture, employee engagement and recruiting while the PEO offloads administrative burden and controls benefit premium costs.
High Level Overview PEO Services:
PEO’s help all “shapes and sizes” of companies in different ways. PEO companies consolidate all tactical HR services from onboarding to exiting of an employee. Some of the main services are providing an array of benefits for employees, running payroll, filing quarterly tax filings, covering workers comp on a cash flow basis, offloading of government compliance and employee risk mitigation. Most PEO’s will also aid with recruiting, expense reporting, training new employees and much more. By consolidating your HR functions to a PEO, you gain access to a large employee base that is grouped together for discounted pricing on benefits and workers comp. Not only do you become more efficient in your HR department, but you also control cost.
Factors for Evaluation of Your PEO Service:
PEO services have many facets to them and all of them vary from company to company. They are all important and we’ve studied each while reviewing the market for the best all-around PEO options. We’ve reviewed the following when looking at each individual PEO:
- -Tax processing
- -Payroll processing
- -Health insurance options and support
- -HR regulation compliance assistance or management
- -HR management and consulting support
- -Recruiting and onboarding support
- -Safety compliance and risk management
- -Time, attendance, and productivity tracking tools
- -Customer service and feedback
- -Additional features and specializations
There are dozens of high-profile PEO service companies to choose from so we went through the effort of selecting the best PEO options that can lead your company to its fullest potential.
At the end of our free assessment of your HR business needs, we make our recommendations on the top 5 PEO’s. No matter which PEO you end up choosing, we will ensure you receive a full PEO solution that fits your needs. Therefore, if a standard service is not mentioned in the list above, please consider it as available.
Benefits of Using A PEO
Insurance Cost Savings – The main reason companies use a PEO is it saves them money. Mainly on the insurance costs of their business. By using a PEO you get to leverage their large pool of insurance to get better rates for your business.
Less Paperwork – Lets face it paperwork sucks. A PEO uses their technology platform to minimize the amount of paperwork your organization has to manage.
Compliance and Legal – A PEO manages all compliance and legal regarding your employees. Know that you are safe having the checks and balances managed by the PEO’s system.
FAQ About PEO Companies:
What is a PEO? –A PEO (Professional Employer Organization) allows a business to outsource its employee management, have other HR tasks handled for them, and gives personnel management support when needed (with most PEOs). They manage your payroll, tax forms and payments, employees insurance (healthcare benefits and workers compensation) and other benefits like 401k, life insurance, long term disability insurance, vision insurance, dental insurance, employee wellness programs, on-boarding new employees.
What are the benefits of using a PEO? The main benefits of using are PEO are cost and time saving. Also they handle HR compliance and allows you to provide more value to your employees and make you more attractive to your employer.
How Much Does It Cost To Use A PEO? – Generally it costs between $1,000 – $2,000 per year per employee to use a PEO. The more employees you have the lower the cost can go.
How does the PEO charge? – PEO’s generally charge a % of overall payroll or an admin fee per employee. We prefer PEO’s that charge an admin fee because all the fee’s are more transparent where as a % of payroll fee has a lot of hidden fees.
Does it cost money to switch to a PEO? – Generally there is a service charge/setup fee which ranges from $1000 to $15,000 depending on size and complexity of the business
How long does it take to get started once I choose a PEO? – It can range between 3-6 weeks depending on the PEO with the average being around 4 weeks.
Can I get health insurance for myself and family as the founder? – Some PEO’s offer this option and some don’t.
Should I Pay myself using a PEO as the founder? – Depending on the corporate structure of your business you should definitely should be using a PEO to do your own payroll.
What is the best PEO in my State? checkout our state based PEO guide here