What Is a PEO and Why Should My Clients Use One?

Your clients know that Human Resources play an important role in any organization. They may even realize that fluidity in HR practices can allow their organization to stay ahead of market forces. However, they probably also know that creating smart HR processes and executing them well takes time and expertise. This is particularly true if the organization has some amount of workforce challenges, such as high turnover or high risk for on-the-job injuries.

If this sounds like your clients, you may want to relay to them the benefits of hiring a PEO.

PEO stands for Professional Employer Organization. Hiring a PEO creates a partnership that allows your HR operations to run more smoothly. By entering into a co-employment agreement (sometimes referred to as staff leasing,) PEOs take on the outsourcing of payroll, workers’ compensation, human resources and employee benefits administration.

So why hire a PEO instead of handling matters internally?

Sharing staff means sharing liability. One of the biggest reasons a PEO can help businesses run more smoothly is that it assumes certain employee-related liabilities. A PEO also handles employment and risk management related claims, taking care of workers’ compensation and working towards the best possible outcomes for both employees and the company in the event of an accident. Having a PEO on board can help your clients make a costly problem more manageable.

PEOs keep you compliant. The PEO your clients hire can deliver professional assistance with employment related regulatory compliance, such as ADA, payroll, OSHA, EEOC, FMLA, FSLA, and more. Companies save money by avoiding lawsuits, fines, and other consequences of breaking regulation rules.

Employees stay happy and stay with your company. PEOs offer access to better benefits, which means happier employees. Having dependable, accurate payroll and better communication of policies and expectations is a great start, but a PEO can sometimes provide extra little perks to employees such as discounts, credit union or banking privileges, and more. PEOs often lower turnover rates, saving the company major dollars on training and onboarding expenses.

Helping your client find a PEO to partner with isn’t just a way to free up their responsibility of providing human resources—it can be an all-around smart financial business decision. As an experienced workers’ compensation insurance agent, you are in a great position to evaluate your clients’ business needs and connect them with the PEO most suited to their organization.


Share This Post