Companies can improve cash flow by using specialists for tasks like human resources outsourcing which is one of the tasks of a Professional Employer Organization (PEO).
There are several strategic reasons to use a PEO:
- PEOs know HR laws and the latest employee-related regulations
- PEOs can steamline a HR workload for the busy owner or manager who wears many different hats in a small company
- PEOs can reduce employment costs and lower insurance premiums
- PEOs can offer solutions on Worker’s Compensation
- PEOs can offer input on one specialty area such as retirement plans or health plans
If you’re considering the type of PEO to use, check their credentials with industry trade associations such as NAPEO, the National Association of Professional Employer Organizations, the largest nationwide trade association for professional employer organizations. The organization has about 400 PEO members in all 50 states.
If interviewing potential PEOs, ask them what clients they've had, how they operate and how much money they have saved companies.
Using a PEO can free up the tasks facing a busy owner or manager of a company even a company that has as few as 15 employees.Most PEOs will usually give a no-cost assessment on how they'll move forward and how they'll improve efficiency. One PEO rep told me, "guess how much it would cost a company to fight a lawsuit they could have otherwise avoided" or reduced insurance expenses.
