A PEO can handle payroll, benefits packages, onboarding, off-boarding, 401(K), employee handbooks, workers’ comp, and HR compliance across the board with federal and state regulations. To understand why to use a PEO, you need to know how it works. Here are a few questions your company should ask before hiring a PEO.

How many employees do you have?

Many consider 20-75 employees to be the PEO sweet spot, as it can free up employers to focus on the business side of the company’s daily tasks without costing too much per employee. While some companies may not need everything a PEO has to offer, they could look into standalone HR services through an HRO. Companies of all sizes use PEOs, but because the fees are factored per employee, it may be cost-prohibitive at a certain point. While these are important things to consider, both large and small companies can benefit from the flexibility a PEO can give them.

Do you have the best benefits you can get?

When your PEO brokers benefits, they aren’t just negotiating for your company’s employees, but for thousands of other employees across their networks. This large pool of employees allows PEOs to secure better, more cost-efficient benefits packages that are usually reserved for larger companies. For smaller companies wondering why to use a PEO, this is one of the biggest advantages.

Even if your company can get great insurance packages on its own, a PEO can help navigate the confusing and ever-changing legal landscape surrounding benefits. Under the Affordable Care Act, companies are still required to provide affordable insurance for their employees. A PEO is an easy way to ensure that your company meets these requirements.

Is your company new?

A PEO can go a long way in helping get your business administration in order so that your employees can focus on opening a new business. PEOs can create employee handbooks, provide training, establish office policies, and much more. While the PEO handles the difficult details of onboarding employees and making your business compliant with state and federal regulations, you can work on making your startup a success.

Do you work across multiple states?

PEOs can be very helpful for companies that are expanding into new states or territories where they are unfamiliar. Working across multiple states makes taxes, payroll, and managing different regulations much more difficult.

States and cities usually have different tax rates to consider. They also have different laws that govern how much employees need to be paid, which workers can be considered independent contractors, and how much time off employees are allowed to have.

Why use a PEO?

The questions above should help companies figure out whether a PEO will work for them, but the bottom line is that PEOs make running a business less complicated. If you want to recruit the best employees and avoid screwing up your compliance paperwork, a PEO is the best way to do that.

LBMC Employment Partners can manage all the daily HR tasks mentioned above, along with compliance management, wage garnishments, payroll processing, healthcare, and retirement. A PEO can reduce liability and offer access to certified HR professionals.

Wondering if a PEO is the right model for your company? We’d love to answer your questions and discuss how we can customize a plan that best fits your business. Contact us today to learn more!