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Ways Employees and Employers Can Benefit from a PEO

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Partnering with a PEO carries significant benefits for employers, but every good business owner also wants to know how that partnership will affect his or her employees. Will it be confusing to have a different employer of record? Will they have to jump through hoops to get questions answered and keep information up to date? While there is always a learning curve associated with any new endeavor, the good news is that employees often enjoy greater security and more flexible options from the PEO partnership.

Why a PEO Is Good for Your Employees

Let’s take a look at four of the most common ways employees benefit from working under a PEO arrangement:

Job Security—Partnering with a PEO allows businesses to take advantage of economy of scale, meaning they can often get better rates for health care and insurance. These cost savings help small businesses keep more employees on the payroll and create a greater likelihood that the business can remain solvent.

Job Satisfaction—Small businesses aren’t always able to offer extensive training opportunities and resources on their own. A PEO makes these resources available to employees, along with improved safety measures, more extensive employee manuals, and better communication with HR. All of these things help employees become more efficient at their jobs, requiring less time to be spent on HR tasks and making the business as a whole more productive.

Health Insurance—Due to increased buying power, a PEO can often get better health insurance coverage than a small business can provide on its own. Employees can take advantage of dental and vision plans, disability insurance, flexible spending accounts, and other options that make health care more affordable and more comprehensive.

Retirement Options— Stuart Robertson states in Forbes that only one-quarter of small businesses with fewer than 50 employees offer a 401k plan for retirement. A PEO can help those businesses provide a sound retirement savings plan for their employees, enabling all workers to have a robust nest egg in place when retirement rolls around.

Employers Benefit Too

Of course, your employees aren’t the only ones who benefit from an outsourced human resources arrangement. When a PEO partners with a small business to oversee HR administration and other similar tasks, the business owner can invest more time and effort into the growth of the business. He or she maintains exclusive control over business operations and decisions while leaving administrative responsibility and regulatory compliance in capable hands. Other benefits include:

  1. Filing federal and state taxes
  2. Help with workers’ compensation
  3. Payroll administration
  4. Better benefits for employees (including options like life insurance, job counseling, adoption assistance, and educational benefits)
  5. Reduced hiring overhead
  6. Recruiting assistance
  7. Training and handbook development

A PEO helps business owners remain current on legal requirements, regulations, and compliance issues, helping to prevent lawsuits based on non-compliant policies. If you’re ready to find out more about how a PEO can help you grow your business, check out our website at

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