Business owners want to retain control over their business — employees, processes, and surely, revenue. When business owners hear the term “PEO co-employment,” many assume it refers to taking control of their business.
This is a common misconception. Co-employment with a PEO does not mean you lose control over your business. You keep full control over whether to hire or fire an employee, discipline them, and other day-to-day decisions. What co-employment does do is enable major cost savings, especially when it comes to getting benefits for your employees.
How Does Co-Employment Work?
Co-employment occurs when two companies share legal employer responsibility for an employee, dividing up those responsibilities. Co-employment is simply a business partnership between your company and a PEO. You retain control over all of your business decisions while the PEO becomes “employer of record” to remit payroll taxes on your behalf. This also allows your business to access the PEO’s Fortune 500 benefits at Fortune 500 prices.
How do PEOs negotiate for benefits at a reduced cost?
Insurance companies want to reduce their risk, and PEOs will provide reduced risk by pooling all of their clients together. This is how a PEO can provide high quality health insurance and lower costs.
You will also see workers' compensation policy options which allows you to pay as you go instead of paying everything up front. A PEO can offer this because it already has the policy in place and paid the deposit.
What Other Costs can a PEO Cut?
Small businesses deal with unemployment claims routinely. They are frustrating and time-consuming tasks. A PEO can handle this mundane task for you, ensuring timely and accurate responses to your unemployment claims. Additionally, a PEO can help you implement policies and procedures that will help you lower your unemployment costs.
A PEO can also cut costs by protecting your company's assets. Labor law compliance is an area small businesses often struggle with. This can become a costly area of lost income for businesses who do not comply, as fines and lawsuits are liberally used to punish businesses. PEOs keep your company assets safe by ensuring your company complies with federal and local labor laws. Not only does this give you peace of mind, it also provides your company with an ability to better allocate your budget on driving the needle.
Co-Employment Saves Your Business Money
PEO co-employment lowers your costs while ensuring you keep control over the day to day operations of your business. You retain all control over the hiring, firing, discipline, and promotion of your employees. You get all of that while seeing a reduction in your overhead by getting services which complement your existing HR staff.
Co-employment saves your company money. The cost reduction you get from a PEO partnership allows you the chance to add funds to your marketing budget to help generate more sales and revenue. You can also re-allocate the time of certain team members to focus on business growth strategies instead of mundane administrative tasks. You get all of this while also having the peace of mind that your business remains compliant with complex and ever-changing labor laws.
Partnering with a PEO means you will have unprecedented service and expertise to ensure your organization runs smoothly and exactly how you envision. Creating a co-employment relationship with the right PEO can make a drastic difference in your company's ability to grow and thrive.
