Top 6 Benefits a PEO Brings to Small Business Owners and Small Business Employees
Small businesses are an important part of the economy and they employ millions of Americans. According to data from the Census Bureau's Annual Survey of Entrepreneurs, businesses with less than 100 employees represented 98.2 percent of the 5.6 million employer firms in the United States in 2016. Often, small businesses cannot afford to access the same types of employee benefits and workers’ compensation insurance available to large employers. Many struggle with how to manage payroll, administer benefits or to provide mobile-friendly technology that makes employees’ lives easier.
More and more small businesses are partnering with Professional Employer Organizations (PEOs) as a way to level the playing field with large companies.
Top 6 benefits a PEO brings to small business owners and small business employees
1. Mobile technology tools
With a PEO, small businesses can access an online human resource information system (HRIS) that makes daily and longer-term tasks easier for both employees and employers. An HRIS makes it easier for employers to create, store, access and delete employee records during the hiring or firing process, approve PTO requests, manage performance reviews and to create reports. Employees use the HRIS to enter their hours in a time entry interface, sign up for benefits during open enrollment sessions, to request time off and to view and print pay stubs, W-2s, employer HR forms and benefits programs.
2. Compliance with employment and tax laws
Keeping track of Federal, state and local employment and tax laws is a big job. Small business owners are typically not experts on these laws and may not be able to hire an expert. When a small business partners with a PEO, they protect themselves from legal issues because there is a team of compliance experts working to make sure that all the rules and are being followed including wage, hour, payment and break laws, requirements for insurance, and others. A PEO can also create an employee handbook that includes appropriate anti-discrimination and harassment policies.
3. Help with payroll
Payroll is included in PEO services. Employers complete the employee application process and track and enter employee hours through online applications provided by the PEO and then the PEO handles the rest including tax withholding and filing, wage garnishments, and more. This service is a huge time savings for the small business owner.
4. Helpful payment options
PEOs provide helpful payment options like paper checks for those who prefer them, direct deposit to pay employees quickly and pay cards for employees who don’t have bank accounts or who don’t want to share their banking information with their employer.
5. Affordable worker’s compensation insurance
A small business gains access to competitive rates for workers’ compensation insurance when they partner with a PEO. This is especially helpful to companies that have high-risk jobs, have had losses in the past and for start-up companies. PEO staff also help to manage the cost of claims, can recommend safety training and coordinate return-to-work programs; taking a big burden off of an employers’ shoulders.
6. Affordable employee benefits programs
A great benefits program is an important part of attracting employees but it can be unaffordable for small business owners. A PEO gives employers access to affordable, comprehensive employee benefits packages that include health, supplemental and retirement savings plans. Small business owners save time by choosing from the benefits packages the PEO has established. PEOs administer benefits packages by enrolling and deleting employees, updating for employee life changes and answering employee questions. They also help with pre-tax deductions from employee paychecks and tax and regulatory reporting.
When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from 401(k) plans to payroll, taxes, health insurance/benefits, and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. Contact us today to get started!