The Early History: Why Did PEOs Start?
In the 1960s, like today, businesses were looking for effective ways to manage rising workers' compensation insurance costs. Professional Employer Organizations (PEOs) emerged in response to this need by providing workers' compensation insurance policies for multiple businesses, they were able to negotiate great rates and pass the savings on to the businesses they served.
Since then, PEO companies have expanded their services to include payroll, employee benefits administration, and human resources support. With the increasingly complex laws and employment regulations, PEO companies have come to be an indispensable partner for businesses wanting to focus on growth without worrying about red tape.
Why Is The PEO Industry Growing?
PEO services have seen double-digit growth each year for almost 20 years for a number of reasons:
PEOs Provide Affordable Workers' Compensation Insurance
Every company needs a form of workers' compensation insurance. Not only do they help increase the overall safety of the workplace through various safety procedures and training, but they also help resolve injured worker claims quickly and effectively.
PEOs continue to be a smart choice for companies seeking affordable workers' compensation insurance. They tend to focus on specific industries or types of industries, which means they have the specialized knowledge to get you a policy suited to your needs and those of your people.
Even better, when you access workers' comp through a PEO service, you not only get savings, but convenient pay-as-you-go plans.
Professional Payroll Services with a PEO
You don't have to do payroll yourself to save money. PEO companies offer full payroll services and take care of all the details for you, including tracking vacation time and deductions. Your provider also offers user-friendly payment options for your team. You not only get payroll that's done right every time, you get back hours a week to grow your business.
Some example of PEO payroll benefits are:
- Fully automated payroll processing
- Payroll with Time and Attendance Integration
- Paying local, state, or federal employment taxes for you
- Payroll legal expertise
- Quarterly or annual reports
HR Outsourcing by a Team of Experts
PEO providers don't just help with payroll, workers' comp, and benefits. You can think of your PEO provider as your own outsourced HR department: Today's PEOs stay on top of the latest labor laws and regulations, which means your provider can ensure you're always in compliance with OSHA, EEOC, and other requirements. Your provider can also save you time by freeing you from bureaucratic chores such as new-employee intake, employee screening, recruiting, and expense tracking.
PEO's Great Employee Benefits for Less
PEO services also help businesses save money and attract great workers by offering better health insurance and dental policies than individual businesses can afford on their own. This is because they have the buying power to allow even small businesses to offer big-business benefits.
Your PEO can also help you manage your healthcare benefits in areas such as:
- Overall plan administration
- Insurance Costs
- Annual planning
- Additional medical costs management through HSAs, HRAs, FSAs
This is just part of how PEOs save small business owners valuable time and money by allowing them to focus on important company goals and expansion rather than navigating the red tape of health insurance administration.
ELQ is Your PEO Expert
In short, Professional Employer Organizations are growing increasingly popular because they allow small businesses to enjoy the same benefits and HR support as large businesses. These advantages have a real impact on the bottom line: A 2012 study on small businesses using PEO services showed they grew faster and were more likely to survive over time than comparable businesses without PEO support.
Since 2001, ELQ has been helping employers find the right PEO for their business. Whether you are looking to lower your workers' compensation insurance rates, or find better rates on group healthcare for your employees, the experts at ELQ can find your perfect fit. Fill out our request form, or call us today to get started.