Professional Employer Organization (PEO)

A PEO (or Professional Employer Organization) differs in several specific ways from an HRO. Perhaps the most important difference between a PEO and an HRO is the bargaining power of a PEO. Choosing a PEO also means that you have a full-service HR solution, rather than a more stop-gap approach. A PEO keeps HR tasks in one location with a dedicated team overseeing all aspects of HR. Considering all the things small business owners must oversee, this siloing can be effective.

A PEO is a co-employment relationship that optimizes human resources for your business. The benefit of being part of a PEO means no matter your company size, your employees will be part of a larger pool, giving you lower benefits costs, and a lower cost per employee for all HR services.

Perhaps the strongest advantage of using a PEO is the increase in the quality of benefits it can help you offer to workers. When a company joins a PEO, its employees are included in a larger benefit community. This allows small businesses to offer high-level benefits, including strong healthcare plans and exceptional 401(k) options that are usually available only to larger companies.

The management of employees become more and more complex each day. Alleviate the complexities of Human Resources Management by outsourcing non-core business functions while you focus on revenue-producing operations.

Becoming a member of a PEO provides companies with:

• Complete HR support
• More time to run your business
• Expert compliance management of Cobra, HIPAA, OSHA, ERISA, etc.
• Efficient payroll processing and payroll tax administration
• Access to Certified HR Professionals
• The power of group access for healthcare, retirement services, dental insurance, and disability benefits
• Access to a larger benefits network, and the ability to offer large-scale benefits to employees

A PEO can help make life easier for both employees and employers by providing quality, compliant, and up-to-date HR services. Using a PEO frees companies from hiring and maintaining a full in-house HR department, while still giving the business the benefits of a full-service department.

PEOs manage a number of different businesses and employees, which is an advantage to its customers. A PEO’s number of members allows them to negotiate with healthcare companies and other vendors as one large unit. While small companies may struggle to get these benefits on their own, PEOs can secure perks usually reserved for only large companies. These include savings on healthcare and benefits, discounts on employee’s personal car or renter’s insurance, or bonus perks like telehealth services.

PEOs also help navigate the increasingly complex healthcare marketplace, ensuring that businesses receive packages that work for both their employees and their budget.

PEOs take a tailored approach to every business they work with. They can perform everything from daily management of HR tasks, like payroll processing, to more complex tasks that can help grow a business, like delivering employee training. In all of their work, PEOs are compliant, which helps limit the legal liabilities that businesses take on. A PEOs ability to negotiate competitive benefits packages also helps companies remain competitive in this tight job market.

A PEO provides your business with a comprehensive human resources solution. Before HR becomes a headache, you should find an HR solution as you’re establishing your business, not after. Most businesses consider engaging with an accountant and a lawyer to be necessary expenses. Unfortunately, the essential work of supporting your staff is often offloaded to an inexperienced employee. It’s important to consider all possible HR solutions so that you can provide a supportive experience for your team members, the most important part of your company.

• New hire onboarding processes, benefits orientation, and employee reviews.
• No matter your company size, your team members will be part of a larger pool, giving you lower benefits costs, and a lower cost per employee for all HR services.
• Competitive employee benefits packages and streamlined HR processes can have a significant impact on your current employees’ satisfaction and new employees’ interest.
• A potential ROI equaling 27.2%, can save you $1,775 per year per employee, grow 7 to 9% faster and are 50% less likely to go out of business than those that do not use a PEO according to a NAPEO study.
• NAPEO studies have also shown that annual revenue growth of PEO clients was twice that of non-PEO clients, and PEO clients were 16% more likely to report an increase in profitability.
• 98% of business owners who use a PEO would recommend one to fellow business owners.

PEOs Help Businesses Adapt to Change

The pandemic completely shifted paradigms related to work and business. Suddenly employers were asked to develop new policies from scratch, comply with new government regulations, and find ways to protect their employees from COVID exposure. PEOs are built for dealing with change, and their success in the pandemic demonstrates their ability to help clients stay on track even during tumultuous times.

Let Your PEO Handle the Paperwork

Many of the small businesses that survived during the pandemic took advantage of the PPP loan program. While these loans were widely available, the process of applying for the loan was too complex for many overwhelmed business owners. PEO clients were 71 percent more likely to have received a PPP loan during the pandemic than other businesses. They were also more likely to have had their loans forgiven.

PEOs are Experts at Recruiting and Retaining Employees

The pandemic has created an ongoing labor shortage for almost every business. Still, PEO clients have seen 81 percent higher employment growth over the last six months than businesses that do not use a PEO. PEOs are familiar with the best ways to attract talent to a company, and they have a variety of strategies to help retain employees once they’ve been hired.

The Benefits of a Co-Employment Relationship

The co-employment relationship is one of the most misunderstood concepts when it comes to small business HR administration. Many small business owners feel a strong sense of pride and ownership when it comes to the businesses they’ve built. When you hear terms like “co-employment” or “employment partnership,” you may feel some hesitancy about providing your employees benefits through an employment partnership.

In reality, an employment partnership or co-employment relationship doesn’t extend past the HR realm. It’s an innovative approach to providing benefits for small companies. PEOs give small business owners greater market impact and bargaining power in a healthcare market where quality care costs can often be astronomical, both for employers and employees. By entering into a larger benefits community, you can provide exceptional benefits for a reasonable price. Since healthcare and retirement providers are interacting with you as a larger entity, they’re incentivized to provide reasonable, comprehensive plans to your employees and the employees of other small businesses. Joining a PEO gives employers power at the bargaining table.

Rest assured, using a PEO to locate the strongest benefits package possible won’t dilute the identity or ownership of your small business. Instead, a strong and well-administered benefits package will only raise the profile of your business.

Here are a few ways that joining a PEO can help you support your employees without spreading yourself too thin.

1. Payroll Changes

Changes to your payroll during COVID-19 may be more dramatic than you have previously experienced. Whereas before, you may have hired or terminated employees periodically, now, you may have payroll changes for several employees at one time. We take payroll off your hands so that you can be sure that the adjustments are accurate and that payroll is processed on time. You can rest knowing that your employees are paid and that any modifications here on out (as your business continues to evolve throughout and after COVID-19) will be taken care of quickly.

2. Changes to Benefits

Whether you’re hoping to offer your employees better benefits for a lower price, or you want to attract new talent to ramp up your business, having a PEO on your side allows you to offer large-scale benefits, no matter the size of your company. You will also have a benefits representative who can walk you through options to fit your employees’ changing needs.

3. Employee Questions

Another benefit of being part of a PEO is that your representative will be there to answer all your employees’ questions throughout the process. As your company changes, the PEO is flexible and informative, changing with you and keeping your employees informed every step of the way. This transparency and responsiveness helps employees to feel supported by your company and allows them to make the best decisions for themselves when it comes to benefits and other HR-related needs.

4. Compliance Expertise

PEOs are experts in compliance when it comes to regulations such as COBRA, HIPAA, OSHA, ERISA, and others. A PEO knows what needs to be done to keep your company in compliance, preventing you from having to worry about making an unintentional misstep. You can also rely on your PEO for all compliance-related questions and concerns as they arise.

5. Employee Access to HR Information

When it comes to LBMC Employment Partners’ PEO, each of your employees will have access to their own portal. This system empowers them to stay up to date on their payroll, benefits, and other company-related elements, such as employee handbooks. All your employees’ information will live in one place, allowing for quick reference and saving time for everyone on your team.

New businesses built around technology can bring energy and innovation to any industry. Usually, startups and small businesses start with minimal capital and spend the first few years chasing qualified leads, honing their process and product, and bringing on staff to support increased demand. If a business is lagging, the stressors of debt, sustainability, and feasibility start to converge. These sorts of worries are what most people think of when they think of small businesses. Yet, even when things are going well, business owners can struggle to stay afloat. When a small business grows quickly, the accompanying personnel or hiring issues can become exponentially complex.

The HR Consequences of Accelerated Growth

With an increase in staff comes a higher chance of staff-related issues. Small businesses want to offer the very best to their employees, but they may be stretched too thin to attend to every issue or question that arises. Instead, their focus is on long-term sustainability. Initially, payroll, healthcare, and retirement can be handled by the business owner or a business partner. However, as additional team members are added, HR implementation and maintenance can easily become a full-time gig. When an on-site employee tries to take this on in addition to his or her main work responsibilities, things can easily slip through the cracks. Often, to be fiscally responsible with their capital, a small business will try to juggle all HR responsibilities until it no longer becomes feasible. Often, small businesses will begin to consider an outside solution when something goes wrong. If paychecks go out late, benefits packages are confusing, or tax withholding is calculated incorrectly, the collateral damage to team trust, harmony, and business integrity can be affected. It can eventually cause your talent to seek the safer waters of a larger company, taking their expertise with them.

It’s an understatement to say that small business owners have a lot on their plates. When most entrepreneurs decide to open a business, it’s because they have a service or product they’re excited to bring to the world. They know that the work they do or the product they offer can make a positive difference in someone else’s life. Whether they’re creating an app, innovating software solutions, starting a local coffee shop, or launching a boutique marketing agency, small business owners can be transformational in every sector.

PEOs Help Small Businesses Run More Smoothly

When you’re focusing on growing your small business or startup, you wear many hats. You know that handling HR, payroll, and benefits are essential, but it can fall low on your priority list. Using an outsourced HR partner can help give you time to focus on big-picture strategic thinking and planning, as well as business development.

By partnering with a PEO, you’re providing your employees with high-level support. It’s a complete solution, rather than a piecemeal approach. In this way, your company can have the best of both worlds. A PEO brings you excellent HR solutions without taking time, energy, and brain space away from your team. After all, hiring a single employee to handle your HR needs in a small business or startup just isn’t practical. It isn’t the best use of profit initially, simply because you’re focused on hunting down qualified leads, growing business and personnel, streamlining processes, and creating and testing new products. With a strong HR partner, you can see measurable benefits that make your life easier and enhance the lives of your employees.

Advantages of Using a PEO for Benefits

Hassle-Free Contract Negotiation

A PEO can relieve the stress involved with negotiating contract variables and rates. Through up-to-date analysis of industry trends, a PEO can make sure small businesses receive the best possible benefits and rates. Because PEOs represent a large group of clients, they are better positioned to negotiate with large insurance companies than a small business with a few employees.

Tailor-Made Healthcare Packages

Small businesses often must settle for a one-size-fits-all healthcare plan for their employees, but a PEO can offer more options. In 2019, employees care more about having a healthcare package that suits their specific needs. PEOs track the latest trends and predict what employees are looking for, such as access to mental health benefits and employee leave policies.

Customer Service and Technology for Employees

Using a PEO allows in-house human resources managers to step away from managing employee benefits. When employees have questions about their benefits packages, they can contact the PEO directly. This streamlined communication benefits both the HR department and employees. Many PEOs now use online HR platforms to allow employees to access their benefits information from anywhere.

Ongoing Counsel

A PEO’s work doesn’t just stop once employee benefits packages are negotiated. The PEO will continue to ensure that employees have the best possible benefits packages through continued research and counsel.

Employee Attraction and Retention

The high-quality benefits packages that PEOs can provide allow small businesses to attract top talent. Great benefits are also the best way to keep employees at a company, preventing high turnover rates.

Health and Wellness Support

More companies today are using health and wellness programs to reduce healthcare costs and keep employees healthy. These programs are sought after by many job hunters and provide many added benefits to companies that use them, but health and wellness programs are often too complicated for small businesses to manage on their own. With a PEO, small businesses can offer health and wellness support without using up the time of the HR department.

So, are you ready to experience all the benefits a PEO has to offer? Contact us today to discuss how LBMC Employment Partners can help your business offer the best benefits packages possible.

Trying to decide if PEO is the right model for your business can seem like an overwhelming decision. But, it doesn’t have to be. Here are a few specific areas to consider if you’re thinking about going with a PEO to handle HR needs:

1. The number of employees or contractors you employ.

One of the biggest misconceptions about PEO providers is that they only work with large businesses. And, while large businesses use them, there are numerous ways a PEO can provide benefits to small businesses.

So, what’s the best distinction for small businesses? Many consider 20-75 employees to be the PEO sweet spot, as it frees up employers to focus on the business side of the business.

2. The type of benefits you want to provide your employees.

PEO’s have thousands of employees, so they can generally secure better, more cost-efficient benefits packages that are usually reserved for larger companies. Later on in this post, we’ll highlight some of the additional benefits your employees can get by partnering with a PEO.

3. The complexity of your state’s tax regulations.

When it comes to abiding by the State Unemployment Tax Act (SUTA), most employers dread the costs and burden of filing these tax returns and managing the claims process. A PEO can handle all the administrative burdens of payroll tax regulations.

4. The growth potential of your business.

If you own or operate a business, especially one that’s growing, you can definitely attest to the ever-evolving complexity of managing employees. With the daily human resources tasks involving payroll, healthcare, training, and benefits (just to name a few), making the decision to work with a PEO as you grow will ensure the HR-related needs of your team are getting the attention they deserve.

5. Your desire to attract and hire top talent.

For large and small businesses alike, attracting the best possible talent is key to long-term success. Even more, preventing high turnover rates is something every company wants to avoid. A PEO can help any business compete for the top candidates in their industry.

Once you’ve made the decision to partner with a PEO provider, the next question becomes: Which PEO provider is the best option for us?

Here are four questions that will help you choose the right PEO partner for your organization:

1. Is the PEO certified?

A Certified Professional Employer Organization, or CPEO, is a PEO that has received ‘certified’ status by the IRS. As one of the only Certified Professional Employer Organizations (CPEO) in Tennessee, we’ve worked hard to meet the latest industry standards and provide our clients with the best experience possible.

2. What type of employee benefits do they provide?

A PEO gives businesses the ability to offer competitive 401(k) and insurance plans. Even more, PEOs can offer several added values for employers to make available to employees, including telehealth services and Social Security and Medicare assistance, as well as home, renters, and auto insurance at preferred rates to employees.

3. What kind of ongoing support do they provide?

To ensure your company’s benefits are cost-effective, a good PEO provides ongoing counsel to business leaders so that they can provide employees with the best possible packages. PEOs can also handle and offer wisdom for billing reconciliation from providers.

4. How is the cost of services calculated?

A PEO can relieve the stress involved with negotiating contract variables and rates. Through up-to-date analysis of industry trends, a PEO can make sure you are properly positioned with the best possible variables and rates.

For many small businesses, a PEO offers them high-level benefits at a reasonable cost, and it allows them to outsource all HR tasks to a common partner. That way, all tasks, paperwork, and administration are housed under a single roof. There are several advantages to a PEO that makes it a solid fit for small business owners.

Higher Efficiency

When HR uses different providers for benefits and technology, company reps are often forced to do the same tasks multiple times on different platforms. With one single provider, there is only one platform and one set of information for each individual task. This saves time for the HR department and also for employees who will have one set portal for all their information.

Better Integration

When information is spread across multiple places, it gets lost. Having employees input information into one technology platform and then request benefits from another can be a recipe for disaster. By using the same provider for HR technology and benefits, employees don’t have to worry about making requests and changing information in the wrong place.

Cost-Savings

Aside from the time saved by combining benefits brokers and HR technology providers, companies who combine vendors will also likely save money. Using a broker who also provides HR technology consolidates costs. It also allows HR representatives to see all employee information in one place, making it easier to identify places to cut costs and make future changes with new employees.

Streamlined Communication

By getting multiple HR services from one place, companies reduce the number of people with whom they need to be in regular communication. With one point of contact, communication becomes simpler, and it’s easier to track who is accountable for particular problems.

Give Employees Access to Excellent Health Insurance

The bargaining power of a PEO is the main reason many small businesses select a PEO to meet their HR needs. As healthcare laws become more complex, it’s essential to partner with a company that can give your employees access to affordable, high-coverage healthcare and keep you in compliance with changing regulations. However, as a small business, you often can’t attract feasible offers from insurers. A PEO places your business in a pool with thousands of other employees, making it an attractive client for many insurance companies. Competing bids will lead to reasonable offers, and you and your employees will benefit.

Negotiate for a Strong Retirement Package

A solid benefits package can be the difference between retaining talent and losing it to a larger organization. As employees build families and careers, they take a greater interest in the money they are saving for retirement. As a small business owner, the 401(k) plans you have access to may not be as competitive as plans offered at a larger corporation. With a PEO, that doesn’t have to be the case. As part of a larger group, you can offer employees impressive retirement plans that allow them to proactively plan for the future.

Protect Your Company Against Liability Claims

Partnering with a PEO can give your small business access to liability insurance. Although many startups don’t consider the need for liability insurance, it can save employers thousands of dollars in legal fees. When a business is just starting out, that type of loss can have a huge impact on a company’s viability. A PEO can take the lead on managing the claim process and can provide expertise and guidance through a difficult and complicated employment situation.

Help Your Businesses Establish HR Documents and Policies

It can be overwhelming to consider all the policies, protocols, and paperwork necessary to make sure your HR needs are completely covered. A PEO can help set up all the legal, governmental, and liability paperwork to make sure you and your employees are properly protected. This is particularly important, considering the frequent changes that occur in state and federal regulations. New businesses also need an employee handbook, answers to frequently asked questions about the benefits package, and procedures in place for any HR issues that may arise. Having a trusted professional handle all these things can take the pressure off an already-stressed business owner.

Attract and Retain Qualified Candidates

Capable and conscientious employees are efficient, effective, and bring creativity and innovation to a company. Unfortunately, these talented individuals can be difficult to keep on a small business payroll, due to their desire to advance their careers. Impressive benefits packages can also draw talent away from a smaller organization. With a PEO, you can retain valued employees by giving them access to excellent benefits. This can prevent talent from being poached by bigger corporations after a few months or years. You can keep expertise and innovation in your office and keep low turnover numbers.

Ensure Compliance with All Federal and State Regulations

Workplace policy is a constantly changing world of new legislation, governmental compliance, repealed bills, tax credits, and new initiatives. Making sure you’re in compliance with FUTA, SUTA, FICA, and myriad state and local requirements can take time, energy, and expertise. Most importantly, it can take your attention away from more important company-wide and overarching goals. This is where a PEO comes into play. Your HR provider should stay abreast of all relevant regulations that apply to your business. From reams of paperwork to submitting everything in a timely manner, a strong HR partner can help you meet every deadline with confidence. When information about healthcare and other employee data is in different places, compliance issues can easily go unnoticed. Combining an HR technology provider and a benefits broker puts everything in one place, allowing HR professionals to easily locate and solve compliance issues.

Organize Payroll Tax Documents and Prepare for Audits

It’s hard to keep track of the countless forms small businesses must prepare and submit to the government. Preparing payroll taxes is especially complex for smaller organizations. In addition to applying for state, local, and federal tax credits, small businesses must be prepared for an IRS audit, should one occur. Using a PEO can help keep all these forms correctly completed and organized, making it a breeze for an accountant to pull the relevant information when taxes are being prepared. Many small business owners feel trepidation and confusion about the complex payroll tax laws surrounding corporations. A PEO will help you feel confident that you’re prepared for anything.

Serve as a Liaison for Employees

Employees don’t always want to discuss medical issues, retirement savings, or other HR topics with a direct supervisor or someone in a C-level position. Instead, a PEO provides a safe and comfortable buffer between employers and employees around employees’ personal information. That confidentiality is highly valuable to your employees. It can be deeply reassuring to know there is an accessible expert who can provide them with pertinent advice and guidance. Employees can feel free to ask all the questions they want, not worrying that they are taking up the time and energy of their direct supervisor. Instead, they can go deep into the weeds of their benefits package with people who know it best.

Provide Ongoing Counsel for Business Owners

As your business grows, your HR needs can change. When you partner with a PEO provider, you’ll receive guidance and help as you navigate new waters. If you’ve worked with a PEO from the very first day of your business, your HR company will have the knowledge and perspective of your company’s history to suggest options going forward. Since they also partner with many other small businesses, they have a wealth of data and experience to draw from while advising their clients.

Collect and Analyze HR Data

A solid PEO provider will collect and share your HR data year-to-year so you can focus on being strategic with your employee-related payroll and benefits information. That way, you don’t have to rely on anecdotal data to make crucial business decisions. Instead, you can analyze your company’s trends so you can assess how your benefits package is functioning. You can also look at employee retention, bonuses, salary, and incentives. This will allow you to make larger systemic changes based on the trends you notice and to be proactive rather than reactive when it comes to tax planning, benefits, and salary deployment.

Because healthcare is one of the top concerns for people, LBMC Employment Partners took steps to add a convenient way to see a doctor at no additional costs to our PEO clients. Blue Cross Blue Shield of Tennessee partnered with PhysicianNow, a “national network of board-certified and locally-licensed family and pediatric physicians who can diagnose, recommend treatment, and prescribe medication when appropriate.” Services like PhysicianNow are changing the way healthcare is provided by offering patients access to board-certified physicians 24/7 from the comfort of their own home.

LBMC EP’s PEO clients and their employees who are covered under the company’s health insurance have 24/7 access to doctors around the nation through PhysicianNow. The service is confidential, just like any regular doctor’s visit, and should be used in non-emergency medical situations, including allergies, asthma, bronchitis, cold and flu, earaches, fever, infections (including respiratory, sinus, skin, and UTIs), sore throat and common conditions for children (constipation, ear infections, nausea, pink eye, etc.).

PhysicianNow suggests the following times to use this service:

• Non-emergency medical issues (especially as an alternative to a costly emergency room or urgent care center visit)
• Nights, weekends, and holidays
• If doctor or pediatrician is unavailable
• When it’s not convenient to leave your home or work
• You are traveling and need medical care
• You need a prescription

All you have to do is use your PhysicianNow user-friendly app, consult with a doctor about your symptoms, and have them call in the needed prescription at your local pharmacy. You can even find doctors who speak different languages or work with hearing impaired patients, depending on your needs.

Not only is PhysicianNow convenient, but it also saves you money. On average, people who use PhysicianNow saved $908 on ER visits, $41 on primary care physician visits, and $9 on urgent care visits. If saving money isn’t enough to peak your interest, PhysicianNow comes highly rated by patients:

• 97% of patients are satisfied with their experience
• 90% of patient issues are resolved
• There’s an average call-back time of only nine minutes
• 93% of patients say they would use the service again or would recommend it to family and friends

It’s easy to activate your account, and we recommend taking advantage of this service immediately so that you and your family will be prepared, if ever in need of a doctor. You will need your member ID on hand, and be prepared to fill out your medical history, just as you would at any doctor’s office. You have three options to sign up:

1. Log in to BlueAccess, and click the “Health & Wellness” tab.
2. Call the toll-free number: 1-888-283-6691.
3. Download the free mobile app.

If you have any questions about PhysicianNow or joining LBMC Employment Partners’ PEO, contact your LBMC EP representative today.

For employers who use a PEO for outsourcing employee management tasks, such as payroll, tax payments, employee benefits, and workers’ compensation, it’s important to understand the difference between a CPEO and a PEO.

With the PEO essentially being the employer of record, it is responsible for filing federal taxes on clients’ employees under the PEO tax ID number. Reports of fraud were alleged as a result of some PEOs collecting the clients’ federal payroll taxes but failing to remit the payments to the IRS. The client company would not be aware of the fraud until it heard it from the IRS — usually many months later. Similar fraud instances have occurred with health benefits. The client company was still responsible for the federal payroll tax payments, not the PEO. The CPEO designation changes that for clients who opt to sign a CPEO client service agreement.

PEO companies who maintain the new IRS CPEO designation offer a greater peace of mind as the IRS also requires ongoing reporting, bonding, and audits by the CPEO to assure all employment tax payments are being made as needed. A CPEO may also enjoy certain tax credits on behalf of its clients, and CPEO clients continue to be eligible for various employment-based federal tax credits.

LBMC EP’s CPEO Designation

LBMC Employment Partners meets the strict auditing and reporting standards of the Small Business Efficiency Act (SBEA) and will assume financial responsibility for federal employment tax payments for its eligible clients’ worksite employees. Additionally, federal payroll tax liability payments will also be guaranteed under LBMC EP’s posted surety bond as added protection.

The CPEO certification is voluntary, however, LBMC EP wanted to pursue the new designation to prove its commitment to operate at the highest standard.

The IRS does not endorse any particular certified professional organization. For more information on certified professional employer organizations, go to www.irs.gov.

In 2008, Parthenon Management Group’s founders, Ronnie Wilkins and Sarah Timm, were faced with an opportunity. They had been so successfully running one of the foremost scientific associations that other associations were taking notice and started asking for their help. Ronnie and Sarah generously prepared a list of preferred vendors and best practices and gave it away to anyone who asked. The associations that approached them found that what they really needed was Ronnie and Sarah’s expertise. The door opened, and they decided to take the leap into association management, becoming Parthenon Management Group (PMG), which is wholly owned by the American College of Neuropsychopharmacology (ACNP).

Many companies benefit from the use of a Professional Employer Organization (PEO) for their HR functions. However, among companies that don’t have experience with a PEO provider, there are many misconceptions about what these organizations do. PEOs are not used for one specific function or one type of company, and they may be more useful for a company than some may think. Here are the top four misconceptions of a PEO provider.

1. A PEO provider is only for larger companies.

Both large and small companies tend to save on costs for professional training, payroll services, and group access to healthcare and retirement through a PEO provider. For small businesses, these perks are often impossible to achieve without the help of a PEO. Looking beyond benefits, companies of all sizes can benefit from the flexibility that a PEO provides. PEOs allow a company’s HR services to grow as the business does.

2. A PEO provider only manages payroll.

While payroll services are a major component of a PEO provider, there’s much more that a PEO can offer. Companies can use PEOs for almost any HR function, including expert compliance management, workers’ compensation, and employee relations consultation. PEOs can also help with major transitions. Because a PEO supports a company on all HR matters, leadership can focus on growing their business.

3. A PEO provider is not necessary if we already have an HR manager.

While a PEO provider can be used as a substitute for HR, most companies use PEOs as a supplement to their current HR department. PEO providers can help an HR manager stay current on employment laws and the ever-changing labor landscape. With the help of a PEO, your HR manager can give more attention to employee professional growth, recruitment, culture, and talent retention without worrying about costly mistakes in labor law or payroll.

4. A PEO provider is not needed for companies that work remotely.

Even though your office environment may have changed to fully remote, that does not mean that your company no longer needs HR services. With remote teams, there can be a greater need to focus on payroll, payroll tax, labor laws, employee engagement, and employee retention. A PEO is the perfect complement to any remote transition and will ensure that your company stays on top of current laws and labor trends.

LBMC Employment Partners’ goal is to help your business be set for success. No two businesses are the same. Let us customize a plan for you.

All content and services on this page are offered by LBMC Employment Partners, LLC. LBMC Employment Partners, LLC, is part of the LBMC Family of Companies and is an independent entity with services and products being provided exclusively by LBMC Employment Partners, LLC.

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All content and services on this page are offered by LBMC Employment Partners, LLC. LBMC Employment Partners, LLC, is part of the LBMC Family of Companies and is an independent entity with services and products being provided exclusively by LBMC Employment Partners, LLC.