A PEO is the way to go.Joe, now that HandySolutions is generating a small profit, it is time for you to think about what you need to do to take your start-up company start-up company A new business. to the next level. As you probably already know, human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. and benefits are one of the biggest expenses that your company will ever incur, and it might be time to consider outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. this area to help defray de·fray tr.v. de·frayed, de·fray·ing, de·frays To undertake the payment of (costs or expenses); pay. [French défrayer, from Old French desfrayer : des-, some of these costs. If you outsource human resources and benefits, you will be able to save money and focus on the more critical areas of marketing and recruiting to grow the business profitably. To outsource, you can choose a Professional Employment Organization (PEO), the only type of organization that will provide you with a one-stop shop One-Stop Shop A company or a location that offers a multitude of services to a client or a customer. The idea is to provide convenient and efficient service and also to create the opportunity for the company to sell more products to clients and customers. for all of your human resource and benefits services. While many companies provide services that a PEO does, a PEO is the only professional organization that will offer all of these services under one roof. A PEO would be a good match for your company for many reasons. First, you shouldn't be worrying about tedious, non-revenue generating tasks like health benefits and retirement savings programs. With a PEO, you can offer Fortune 500-style benefits, and you can be in a more attractive position to lure better employees and recruit more contractors. Based on the size of HandySolutions, the PEO administrative fees would typically run about 3 percent of annual gross payroll. Based on your current situation, a PEO could cut your administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. as much as 50 percent a year. When you contract with a PEO, that company takes over the responsibility for your company's human resources area on an outsourced basis, while you still manage the clay-to-day activities of the company, plus you oversee any employees and contractors. With this "co-employer" relationship, you gain more time to focus on profits and growth. A PEO would provide HandySolutions with a host of benefits and services that are generally cost prohibitive pro·hib·i·tive also pro·hib·i·to·ry adj. 1. Prohibiting; forbidding: took prohibitive measures. 2. for a lot of start-up companies. Payroll administration, benefits, workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , taxes and insurance are just a few of the services you would receive in the co-employment relationship. In addition, you can get access to benefits such as national health plans and 401(k) retirement programs, all at an affordable cost. Under the new relationship, your administrative job gets easier. Each pay period, you simply cut one check to the PEO. In turn, the PEO handles payroll, benefits, regulatory compliance, taxes and insurance, along with all the associated paperwork. This would free up your wife Cecilia -- who currently handles bookkeeping bookkeeping, maintenance of systematic and convenient records of money transactions in order to show the condition of a business enterprise. The essential purpose of bookkeeping is to reveal the amounts and sources of the losses and profits for any given period. -- to focus on other aspects of the business, such as recruiting or marketing. What's even more appealing, you could work out a deal with the PEO to make available at a discounted group rate its services to your network of contractors. Most PEOs would welcome the opportunity to have access to a group of potential, clients, such as HandySolutions' contractor network. When investigating PEOs, you should research the following items: * Length of time in business. * National vs. regional scope. * Client references. * Service model. Finally, you should obtain at least two to three proposals before selecting a PEO. For more information on PEOs and the PEO industry, you should visit PEO.com or the National Association of Professional Employer Organizations A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. It does this by hiring a client company’s employees, thus becoming their employer of record. at NAPEO NAPEO National Association of Professional Employer Organizations .org. About the writter: In addition to his sales position with SES, Jim Carpenter manages two of the company's largest naitonal accounts. During his career he has coordinated and completed the development of a variety of successful marketing programs in the medical and health care industries. SES has partered with the Detroit Regional Chamber of offer a complete Human Resource Solution package that allows Chamber members to outsource their human resource functions. |
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