Partner Content

The 5 top benefits of using a PEO


Every small business owner knows that every dollar counts when it comes to running a business. As a business grows, HR demands also increase significantly. Digital Exits based in Maryland could be what you’re looking for to help you handle some or all of your business human resources tasks.

In this article, we will explore how small businesses can benefit from PEOs, whether they are looking into partially or completely outsourcing third-party organization help in HR functions.

What is PEO?

A Professional Employer Organization (PEO) is a co-employment alternative that small businesses can benefit from their HR functions. Besides, there are many benefits of partnering with PEO like low-cost health insurance, frees up resources of employing a full-time human resource department and allows you to devote your time in the business among other benefits.

When you factor in all the benefits that a professional employer organization can offer your small business, then you can be assured that you’ll meet your goals in no time.

Here are six key areas where entering into a co-employment with a PEO can help you save money and assume many employer-related responsibilities.

5 Top benefits of outsourcing HR functions to a PEO

PEO’s will save you money, and the headaches that come when running a human resource department and dealing with employees. Let’s dive in and see how you would benefit from PEO services.

#1. Low cost of health insurance and other benefits

PEO’s have a high purchasing power when it comes to buying health insurance. PEO’s can negotiate better rates from insurance companies since they have pooled businesses together.

Besides, PEO’s have established relationships with insurance companies and can, therefore, leverage on better benefit plans like dental and vision coverage, life and disability benefits, a flexible healthcare spending account and other services.

#2. PayRoll

PEO s will run your day to day human resource processes such as payroll processing and critical accounting costs. These companies automate the payroll process and effectively handle withholding taxes and ensure that you’re compliant with the state and federal employment laws.

#3. Retirement savings plans

Your employees will benefit from retirement savings plans like 401k. The 401k plan allows the employees to defer compensation so that they can benefit from other contributions. Besides, a PEO helps to manage other administrative tasks like distribution processing, workers compensation among others

#4. Employee onboarding

Small establishments spend a lot of time and money placing job ads, interviewing candidates, drug screening and other tasks that eat into their time and hard earned money. PEOs will offer dependable recruitment assistance and provide the right person for the job who will match up with your company’s employment needs.

A PEO will also be able to evaluate the candidate’s attitude, and the capacity to perform in a real job setting.

#5. Lawsuits

A lawsuit from an employee can hurt and devastate your small business bringing it to its knees. A PEO will help you keep employer liabilities in-check like wrongful termination and other employment-related claims.

In the case you have an in-house HR department, outsourcing human resource professionals will give your business a significant advantage.

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