Hiring a PEO is the best way to reduce the burden of administrative tasks so you can focus on more important things at hand.
Why do so many businesses rely on a PEO? As a business owner, you know that time is money. However, you may also find yourself completing administrative projects that eat away all of your spare time.
Instead of focusing on growing your company, you end up worrying about processing payroll or managing a workers’ comp claim. Not only are these duties stressful, but they also prevent you from using your energy elsewhere.
Now imagine if you could trust someone else to handle these tasks for you. Here at Coastal Work Comp Brokers, we want to do just that. Our firm provides services to small- and medium-sized businesses across a variety of sectors.
We specialize in all types of high-risk, high-mod, and niche industries. You can even turn to us if your business is a new venture or carries a multi-state risk. With our expertise and skill, you’ll finally be able to devote your valuable time to more pressing matters.
What PEO Means
What does PEO stand for? This acronym stands for Professional Employer Organization. These companies offer services to help streamline stressful administrative work.
Here are some of the most requested services a PEO may provide a small business:
- Workers’ compensation insurance
- Payroll processing
- Employee benefits
- HR services
- Risk management
Our team at Coastal Work Comp Brokers can help you customize the services we offer based on your business needs. We have clients nationwide, and you can count on us to follow the rules and regulations of each state.
How Does Hiring a PEO Work?
Small and medium-sized businesses usually have tight budgets. Overspending is never an option. Because of monetary restrictions, business owners often try to handle the HR needs of their company without any help. Doing so, however, often causes more problems than not.
Contrary to what you may believe, PEO companies can actually help you save money. Most offer competitive pricing and customizable plans. The services they provide are a cost-effective solution to managing your human resources needs.
Working with a reputable provider will lighten your workload, and you’ll have more time to focus on scaling your business.
When you hire a PEO broker, you enter into a co-employment agreement. Essentially, the company will share employer responsibilities alongside the business owner.
For example, the PEO will handle payroll and report employment taxes for the local, state, and federal agencies. The business owner will retain responsibility for all other operations. These may include development, production, marketing, or sales.
The PEO provider and the business owner may share a handful of responsibilities as well. But these vary based on the contractual agreement.
In most scenarios, the PEO company will act like a complete human resources department. You can count on them to provide benefits and workers’ compensation coverage for all employees.
Insurance Options for Smaller Companies
Buying insurance isn’t always easy. And if you work in a high-risk field, it may seem impossible. Private insurance companies exist solely to turn a profit. If an insurer thinks your company is too risky, they will choose not to insure you. Even if you manage to find a policy through a private company, you’ll probably pay outrageous premiums.
State Fund provides insurance options to those who cannot get it otherwise. The government has to cover you even with a high-mod rating or a non-renewal on record.
However, don’t expect to find a good deal. State Fund premiums tend to be the highest on the market. Most companies only use them as a last resort.
PEOs are a great option if you can’t find affordable private insurance and don’t want to deal with the State Fund. And when it comes to obtaining workers’ comp coverage, you may be able to save a small fortune.
Coastal Work Comp Brokers offers pay-as-you-go plans to help lower costs and eliminate the annual audit.
We may be the right choice if you:
- Employ 5-500 workers
- Want to lower your premiums
- Are with the State Fund
- Were non-renewed by your current carrier
- Have a gap in your coverage
- Work in a high-risk industry
- Have a high experience modification rate
- Want to say goodbye to annual audits
What Is the Benefit of a PEO?
When you first started your company, you had a vision in mind. It was your dream to grow a successful business and build a large audience. You wanted to devote all of your energy into making something truly great.
However, there is a good chance you didn’t think about all the behind-the-scenes paperwork and tasks that would also fall into your lap.
Business owners often wear many hats. Not only do you deal with your company’s daily operational needs, but you also have to consider the needs of your employees.
As a result, you also become the payroll, human resources, and compliance manager. But you may not be an expert in these fields. And with only a certain number of hours in a day, fulfilling all these roles is often too much for one person to handle.
Entering into a PEO agreement is perhaps the best way to reduce the number of hats you wear. You can count on your provider to handle all of the HR duties, from handling payroll to processing workers’ comp claims.
You’ll also have access to more benefits and employer amenities than you would otherwise. Just imagine how all this newly found free time can better serve your business!
What Are the Pros and Cons of a PEO?
Why would you want to welcome a co-employer into your business? Well, as it turns out, for many reasons. PEOs can have a profound impact on a company’s bottom line.
Here are just a few examples of why co-employers are actually a good thing:
- You’ll pay less for insurance. Since your employees also become the PEO’s employees, you’ll be able to find better insurance policies and lower premiums. When shopping for plans, a PEO can pool your employees with those of other companies. Instead of paying higher rates as a small business, you’ll finally have more leverage to command better prices.
- Your employees will stick around for longer. Workers want to go where they get the most benefits. Even if they love working for your small business, if you can’t offer them the insurance they need, they’ll end up looking elsewhere. PEOs not only handle benefits packages, but they can also engage in programs to increase retention rates.
- It will cost you less in the long run. Hiring an in-house HR department isn’t cheap. Not only do you need to find the space to put an HR team, but you should also expect to provide them with the office tools they need.
On top of that, HR managers command a top salary. PEOs are a more affordable option. And since they will work from their own office, space is never a concern.
- Managing workers’ compensation will be a lot easier. Many small- and medium-sized businesses dread finding workers’ comp policies. Coverage isn’t cheap, and many insurers overprice their plans for smaller businesses. And if you can’t find anything else, you end up with the State Fund. PEOs take the dread out of obtaining coverage. They often specialize in high-risk industries, and finding a pay-as-you-go plan will even eliminate the annual audit.
Most companies that partner with PEOs only wish they had done it sooner. Handing many of your daily responsibilities over to an expert makes it easier to tackle other aspects of your business. And you’ll probably save a good chunk of money in the process.
However, it’s not fair to sing the praises of PEOs without touching on some of the downsides. Weighing the pros and cons will ensure you make the best decision for your company.
Keep these things in mind:
- PEOs reduce face-to-face interactions. When you have an in-house HR department, your workers can stop by the office at any time to speak with someone. It’s easy to set up on-site training or implement policy changes. Since PEOs work offsite, you won’t have that same personal connection.
- You’re not the PEO’s only co-employer. PEOs cannot survive with just one client—some of the best ones have thousands. While you may not get the personal one-on-one attention you crave, you’ll still get the expert service you need in a timely manner.
- You lose some control. Entrepreneurs love to be in control of the situation. But since both you and the PEO are co-employers, you must trust them to handle their assigned tasks. For instance, if they want to change your benefits package or workers’ comp plan, you need to believe it’s in the best interest of your business. Truly great and established PEOs will never lead you in the wrong direction.
- You need the right number of employees. PEOs usually specialize in serving smaller businesses. The majority require you have 5-500 employees, although it’s sometimes possible to find a PEO for one employee. However, it’s usually not necessary, and self-employment insurance may be the better option.
When it comes to the cons, those are pretty much all of them. If the idea of having more money and time to allocate to the growth of your business sounds like a good plan, then PEOs are the way to go.
A PEO Company for High-Risk Industries
Coastal Work Comp Brokers wants to change how you think of PEOs. We specialize in serving small- and medium-sized companies from a variety of niche industries. Even if you can’t find affordable insurance or workers’ compensation for your employees, we can.
Our clients include high-risk and high-mod industries. We offer pay-as-you-go plans to help you avoid the annual audit, and we can also reduce your premiums by 30-40 percent.
Too risky for other companies? It’s no problem for us. Whether you have gaps or losses, Coastal Work Comp Brokers can find you the best workers’ compensation coverage. There’s no business we won’t cover!
We also provide risk management and human resources at no extra cost.
Call 323-543-4141 for expert help in finding the best PEO option for you.