Companies are busy places and getting busier all the time. Administrators or office managers can be overwhelmed with the responsibilities of supervising employees and overseeing such things as billing, insurance coding and vendors, not to mention working with clients. *LBMC ‘eats its own cooking’* LBMC, the largest professional services firm based in Tennessee, not only provides PEO services, it is also a customer. All 400 LBMC employees in the firm’s three offices, Nashville, Knoxville and Chattanooga, are served by LBMC Employment Partners and participate in the same insurance plan as the PEO’s clients. “We’ve got skin in the game when it comes to shopping insurance plans,” says Brooke Thurman of LBMC Employment Partners. “We are part of those exact same plans.” In such a demanding environment, it can be easy to overlook such human resources issues as keeping personnel files up-to-date or staying abreast of the latest regulations. The time required to shop for a new health insurance package can be a huge disruption. Faced with such challenges, many administrators and office managers are turning to Professional Employer Organizations for assistance. Professional Employer Organizations – PEOs for short – provide a variety of advantages: * Outsourced administrative services * Benefit plans with a large employee base to keep costs down * Assumption of some of the risks of being an employer And PEOs are different than typical outsourced service providers because a PEO becomes a “co-employer.” That means that staffers become employees both of the PEO and the company itself. The company is the employer for purposes of hiring employees, scheduling them, supervising their work and similar tasks. The PEO is the employer for the purposes of their pay and benefits, complying with employment law and other administrative matters. The PEO assumes partial liability for the employees and is paid a fee by the company for its services. The PEO can discipline employees and has other prerogatives of an employer. “The whole concept of a PEO is to take away the administrative headaches from a small business or a medium-size or large company so that they can focus on their core competencies – what they got into business to do,” says Brooke Thurman, business development associate for LBMC Employment Partners, which operates a PEO. “A PEO saves them time, but doesn’t take away control of the areas they need to manage.” * Employees gain from PEOs* Employers aren’t the only ones who benefit from using PEOs – their employees do as well. Employees of small businesses frequently are not protected by some of the employment regulations that cover workers at larger companies. But when those smaller employers join a PEO they become part of a larger pool and extra protections kick in for such things as COBRA, Family and Medical Leave, and protection against age discrimination. Employees may also have access to a larger range of benefit options under a PEO than their employer was previously able to offer. Those protections and benefits can be a substantial help in recruiting employees. PEO purchasing power can save money on benefits A key advantage of a PEO to small businesses is that it creates a health insurance pool made up of all the “co-employees” it has at the various businesses it works with. That relatively large pool of employees gives the PEO bargaining power with health insurers – far more bargaining power than an individual company would wield. That generally means lower rates and the ability to offer more than one plan. In addition, the PEO operated by LBMC Employment Partners requires medical underwriting before it will initially accept a client into its pool. That protects existing clients from rate increases because of an abnormally unhealthy employee population at a potential new member. That same purchasing power applies to other benefits as well, such as life insurance, disability insurance and 401-K plans. Small businesses get better deals by putting their employees in the PEO pool. In some cases, the savings garnered from the PEO benefit plan can completely cover, or more than cover, the fees that LBMC Employment Partners charge for administrative services, such as payroll and HR management. LBMC Employment Partners also offers a wellness program called Healthcare21 that assists employees in living healthier lives and in turn reduces health insurance claims and premiums. PEO expertise saves time for busy administrators Shifting responsibility for administrative services to a PEO can save a significant amount of time for a company. Just think of what it takes to deal with a Workers Compensation claim, or to update the employee handbook or to process payroll. What’s more, a PEO can provide expertise in areas where government regulations are complex, such as OSHA or EEOC. That expertise not only can save time, but in many cases can provide a better result for the company. “There are so many businesses that are out of compliance,” Thurman says. “It only takes one employee situation to create a huge liability exposure. If they terminate someone in an inappropriate manner or if they’ve got an allegation they don’t handle properly, there’s a lot of ramifications from that.” Drawing on PEO expertise, Thurman says, “allows a small business to look and feel larger than it is.” Visit the Employment Partners Web page [1] or contact us directly. LBMC 615-377-4600 info@lbmc.com [2] [1] http://www.lbmc.com/human_resources_services [2] mailto:info@lbmc.com