PEOs: A Small Business Alternative That Empowers Profitability Over Paperwork

It’s been a rather chilly summer here in Chicago, where Perspectives’ is headquartered, so I can’t help but look forward to the National Association of Professional Employer Organizations (NAPEO) conference in Miami next week.

And, although I’m pretty self-sufficient, it is great to have a team of people managing my travel arrangements, preparing our marketing push and handling other detailed aspects of my itinerary, so that I can focus on our top business objective: to connect with people that our business serves.

In a sense, that’s also what professional employer organizations (PEOs) are all about.  They handle the management of human resources, employee benefits, payroll and workers’ compensation so that businesses can focus on the services that they deliver to their own customers. 

That can be extremely beneficial to the bottom line – especially for small businesses, which are likely to gain a greater breath of benefits at a lowered shared cost through a PEO.  Naturally, this is just one benefits option available, but for some businesses it can also offer significant piece of mind.  

That’s because PEOs offer small business leaders support and relief from managing the complexities of claims paperwork (workers’ compensation, unemployment and insurance), payroll and payroll tax compliance and time-consuming regulatory matters.  Take this assessment into consideration:

“Between 1980 and 2000, the number of labor laws and regulations grew by almost two thirds, says the federal Small Business Administration, which estimated owners of small or mid-sized business spent up to a quarter of their time on employment-related paperwork. PEOs assume much of this burdensome responsibility and help companies comply with all these regulations.”

The value of a PEO to a small business owner is similar to value of the employee assistance programs (EAPs) we deliver to PEOs and individual organizations alike.  EAPs help keep employees productive and engaged in your business; PEOs allow small businesses leaders to stay engaged in increasing profitability rather than employee paperwork. 

It’s a nice balance and can be a great partnership.  For us, having a PEO as a client is great because it allows us serve a large number of small businesses that may not otherwise have had the budget for an EAP.  Conversely, small businesses that hire a PEO with an EAP are able to tout an enhanced benefit offering that helps retain and attract talent, and keep their business more productive.

As I mentioned, joining a PEO is just one option open to small businesses.  But, even in a good economy, smart leaders delegate responsibilities and services to those that can handle them best.

Frankly, I could make my own travel arrangements, but the time spent would take me away from serving our customers.  And, as someone that’s been personally invested in this business for nearly 30 years, I’m pretty passionate about the service end of what we do.   

From that perspective, I think that PEOs offer small businesses a pretty powerful alternative.

Tags: EAP, Employee Assistance Programs, NAPEO, PEO