Pros and Cons of Partnering with a Professional Employment Organization

As a small business, you know that there are some things that you have a harder time dealing with than your average large business or corporation. The internet has helped even out the playing field in many ways, but it can’t do everything. Have you ever considered partnering with a professional employment organization (PEO)? It’s one thing you can do to help even things out even more.

Benefits are one example of something that a PEO can help your small business out with. It’s tough for smaller businesses to offer competitive benefits, since doing so can be outside the budget. That’s where a PEO comes in. Because PEOs handle benefits for larger groups of employees, they have more negotiating power and can negotiate lower rates, which can then get passed on to your business. The flip side is that you won’t be able to customize the benefits you offer and providers may change without much notice. That can lead to changes in prices, which can be stressful for employees.

Payroll and taxes can be complicated, but it’s essential to get them right. Making mistakes can cost your business big time. PEOs can help with that and handle them for you. Of course, there is no guarantee that mistakes won’t be made (though naturally every effort will be made to avoid them). In the event of mistakes, your business could be fined or penalized for noncompliance. The upside is that any HR professionals you have on your payroll won’t have to deal with these tasks, freeing them up for other things and increasing their productivity.

Not every business can have a complete, full time HR department on their payroll, but each one still needs HR services to some degree. It’s part of what makes it possible for a company to attract quality employees. A PEO can provide services like onboarding, orientation, and recruiting. The potential downside is that employee access and visibility are limited. That can make communication more complicated and time consuming. Still, it may be a worthwhile trade, depending on what your company needs.

There are some definite pros and cons to partnering with a PEO. It’s not the perfect fit for every small business, but for those that do decide to enter into that partnership, it can be a great opportunity to become a more competitive business that is better equipped to attract quality employees. Since your employees are what make it possible for your business to be successful on a day to day basis, that’s something every business, big or small, needs.

Do you need a PEO or ASO? Quality Payroll can provide both. Learn more about each option here .

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