BCN Services

Is Your Company Too Large for a PEO?

Large group of happy BCN Services clients

Maximizing profits and streamlining efficiencies are essential to you as a business owner. One way to achieve both goals is through HR outsourcing.

But do small, medium-sized, and large companies benefit from a Professional Employer Organization (PEO) partnership?

The truth is that each size company will see benefits in different areas of their business.

PEO for Small Business

Small businesses that partner with a PEO often see the most considerable cost savings from reduced health insurance costs. A PEO will enter into a co-employment agreement with your business, sharing certain responsibilities for your employees. These responsibilities allow the PEO to pool your employees together with their other clients, giving the PEO negotiating leverage. Through this partnership, the PEO can get high-quality health insurance options with lower premiums than what you could get on your own.

Co-employment does not mean you lose any control over your business or your employees. You keep the absolute right to hire, fire, and discipline your employees as well as day-to-day management. Through a co-employment relationship, your PEO can help you get less expensive health coverage. Beyond that, PEOs complement your existing HR team by absorbing mundane administrative burdens such as:

  • Payroll
  • Tax remittance
  • Compliance and regulation
  • Handbook and policy creation
  • Training programs
  • Benefits administration

Your existing HR team can shed these duties and focus on growing your business through and making you an employer of choice.

PEOs for Medium-sized Businesses

Medium-sized businesses, those over 50 employees, have different needs and concerns than small companies. Reaching the 50 employee mark unlocks compliance requirements. There are many regulations that your business needs to adhere to:

  • Affordable Care Act (ACA)
  • Family and Medical Leave Act (FMLA)
  • Consolidated Omnibus Budget Reconciliation Act (COBRA)
  • Equal Employment Opportunity Commission (EEOC) regulations

These federal regulations, along with many others at the federal, state, and local levels, are complex and require expert level understanding and analysis. This is extremely important because any non-compliance could cause hefty fines, lawsuits, and embarrassment for your company.

Partnering with a PEO gives your medium-sized business access to compliance experts who can help guide your business and ensure compliance. PEOs can also handle EEOC complaints and minimize the chances of fines or lawsuits.

A PEO can also help reduce your workers’ compensation costs by auditing and implementing world-class safety programs as well as return-to-work programs.

Cost savings are essential to medium-sized businesses, and every dollar matters.

PEOs for Large Companies

As a larger employer, you may handle most HR tasks in house. Over the years, you built an internal HR team that has grown and suffices for most of your HR needs.

When you partner with a PEO, you can outsource HR duties, complementing your in-house HR team. By transferring the complex and mundane HR tasks to a PEO, you free up your internal HR employees’ time to help focus on your core business needs.

Your HR team can now create an engaging and efficient workplace. When your company has a magnetic culture, people want to come work for you, and existing employees want to stay. This creates loyal and efficient employees who can help your business grow and reach new heights. Attracting and retaining top talent in your industry is key to retaining company assets. High turnover is extremely costly, and increasing your attrition will help your bottom line.

Companies of all Sizes See PEO Benefits

No company is too large to see a benefit from a PEO partnership. Smaller companies will see a larger positive ROI than bigger companies, but that does not mean large companies should avoid PEOs.

Quite the opposite. Regardless of size, every company can see a positive impact on their business through a PEO partnership. The larger your company, the less tangible those benefits are at first glance. However, upon further inspection, you will find that a reduction in turnover will increase your profits. This comes from shifting your internal HR team’s focus to building and maintaining an attractive work environment.

Turnover costs companies thousands of dollars per employee. Reducing that statistic puts more money in your company’s pockets, capital that you can re-invest in your company, further strengthening your team’s loyalty.

Whether your company is small, medium-sized, or large, you can benefit from the services of a PEO.