4 Ways PEO’s Help Businesses Avoid Headaches

Our clients operate a wide variety of businesses. From single-location retail stores to construction companies, we are always impressed by the levels of expertise in various industries. While we focus on staff scheduling, we realize that you cannot be as skilled in employee management any more than we would know how to run your operation.

Most organizations provide a product or service. The human capital side of the business is a different specialty altogether, and employee issues can be stressful and time-consuming. But you’ve probably had to dedicate more time than you wanted to personnel concerns and legalities.

Even if you have employees, your best skills lie in running your franchise, not labor compliance and personnel management. As your labor employee base expands, you will spend more time on HR activities from recruitment to payroll reports. If your daily headache is related to employment activities for your workforce, you can benefit from a PEO.

A PEO, or Professional Employer Organization, is a vendor who partners with your franchise business to provide outsourced HR functions and guidance. Your business has probably experienced various employment challenges, and PEO’s are there to help with multiple functions that enhance your organization and, often, reduce your costs and risks. They serve smaller companies with fewer than 50 employees who lack internal HR expertise.

1. Better Benefits. Some states require that businesses offer medical benefits to employees. It is unquestionably a costly requirement. With a PEO, benefit programs are part of a larger buying group that provides your franchise with better group pricing and more generous offerings like free life insurance.
2. Workers’ Comp Rates. In some industries with a higher risk of injury, worker’s compensation expenses are crippling to a small business. And you can be sure they will continue to rise. With a PEO, small companies have access to a different evaluation process and cost structure. Costs are usually much lower than any single operation could find on its own.
3. Legal Compliance. Labor law is unforgiving if you end up on the wrong side of it. Even a small error in scheduling records or can deplete a franchise’s financial resources. A PEO offers confidence by ensuring compliance with new laws and updates, like scheduling lunch breaks or accruing hours toward vacations. In particularly difficult states, like California or New York, the PEO stays on top of labor law compliance details that no small business owner could ever do alone.
4. Reduced Legal Risk. While PEO’s vary, most act as a co-employer of your employees. The status changes nothing in your business operation, but it does mean that the PEO shares the legal responsibility to do as they promise—protect you from legal challenges by avoiding them. In addition, as a co-employer, they become co-defendants, if needed, and help protect your bank account from a disgruntled employee or a scheduling or reporting mistake.

The point is that the depth of HR service provided by a PEO mitigates labor law errors, legal risks, and HR headaches. It is an essential part of a small business tool kit so that you can dedicate yourself to your field of expertise, which is not the convoluted world of your region’s wage and labor laws.

Author Profile Jon Forknell is the Vice President and General Manager of Atlas Business Solutions, Inc., a software marketing company specializing in employee scheduling software, including ScheduleBase employee scheduling software, and other business software solutions. In the past, Jon has been recognized by the U.S. Small Business Administration as a SBA Young Entrepreneur of the Year. For many years, Atlas Business Solutions has been named one of Software Magazine’s Top 500 Software Companies.