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Understanding Professional Employer Organizations

It goes without saying that an employer-employee relationship can either make or break a business, whatever industry it might be.

Employees play a huge role in a company’s success. Their attitude, energy, and hard work help a business achieve and even go beyond its goals. This is why it is important for employees to build lasting relationships not only with their clients but more importantly with their employees.

Realistically, when employees work hard to provide good progress for the company, the company should repay its employees with appropriate compensation and benefits. What greater motivation than knowing you’re being compensated in a correct and opportune manner, right?

Being a business owner, you only want everything to thrive. Whether it may be your products, services, customers, or your employees. Micro-managing a lot of things at a time may be beneficial to business owners, but it can also stray them away from the one thing they should mainly focus on, and that is, to determine the strategies that can help their business grow.

It is one thing to think of ways how to grow your business and it’s another to think of ways on how you can keep your business and employees. To help you keep both your business and employees happy without losing your sanity, you should explore the wonders of a Professional Employer Organization, mostly referred to as PEO.

My diary with PEO written out in it. Don’t tell anyone.

Understanding Professional Employer Organization

A PEO is an organization that allows businesses to outsource human resource services. These services include but are not limited to Payroll, Taxes, Benefits, and Compensation. Taking away time-consuming and number-intensive tasks like these from the company’s employees will let them shift their focus and energy towards improving the progress of the company.

Guy talking to other guys.

PEO vs. Human Resource

Subscribing to a Professional Employer Organization does not completely disregard the importance of having a Human Resource Department, or a Human Resource Personnel at your business. Having an HR Officer will still be beneficial to your company since that point person will be in charge of checking up on the progress and well-being of your employees. If there is anything PEO lessens the burden of the HR Department.

PEO vs. Staffing Agency

The PEO industry is different from Manpower/Staffing Agency. Although it might be easy to confuse the two because of the nature of the industry, business owners should learn the difference between these two. One main difference is that a Staffing Agency provides employees for a company, the PEO employer does not do that. Instead, the company itself hires its employees and leaves the financial management to PEOs.

Benefits of a Professional Employer Organization

Having a PEO helps all kinds of businesses, yet small businesses are usually the ones who benefit more from PEO. This is because when a business is starting, and there are only a few employees, having a PEO eliminates the need for a full-time or multiple accounting staff or human resource staff. If a business is only starting, employers should focus more on bringing in more clients or the improvement of their services rather than multiple paperwork from the HR Department.

One of the major advantages of a PEO is the improved tracking and documentation of the employees’ financial documents. Filing documents especially financial documents can be hard, and it’s much harder if only one employee works on this. Conflicts from requesting financial data amongst co-workers can be reduced and eliminated eventually because PEO streamlines tasks and prepares documents ahead of time.

Another noteworthy benefit is the cost and time savings. And when we say time, we also mean effort and energy. When employees are not drained and stressed with HR responsibilities, they can have a more positive disposition when meeting with clients and they can focus more on the operations of the company. PEO reduces company costs by making sure that the financial data is accurate. More importantly, PEO protects the company from paying a huge amount of money because of compliance liabilities.

A couple walking in the country.

Trusting an outsider for your business might scare you a little, but realizing that a PEO will work closely with the management will surely help you look at it in a different light.

Your employees work hard to improve the quality of your business. So it’s also right to compensate them in the best and proper way!

Contact us today to get a quote for your PEO needs.