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Q. What is a Professional Employer Organization?
A. A Professional Employer Organization, also known as a PEO, is an effective approach to the management of certain human resources functions, which detract from the core business of our clients. By the establishment of a contractual relationship, National PEO allows it clients to transfer the burden and thereby eliminate the time and cost of non-productive, but essential processes. The PEO industry came into being in response to the human resources challenges posed by the changes in the work place environment. Initially, the arrangements of a PEO were known as employee leasing. Under the PEO contractual arrangement, clients transfer their payroll, benefits, Worker’s Comp and Human Resources responsibilities to the PEO for the benefit of both organizations due to increased efficiencies.
Q. Why should you consider utilizing a PEO?
A. Truly successful organizations have discovered that they must focus on their own core competencies-doing what they know-and outsourcing the time consuming, non-revenue producing responsibilities. They seek strategic partners to achieve higher degrees of efficiently for their companies by letting a professional employer organization handle the non-revenue producing functions we have described.
Many small organizations have found it very prohibitive to keep pace with the ever changing rules related to Federal, State and local requirements involving compensation issues, hiring practices, and tax issues. These small and midsize companies struggled with the difficult employment environment by adding in-house human resources personnel and capital. Utilizing a PEO alleviates these burdens and saves the resources.
Q. Specifically, what does National PEO handle for its clients?
A. National PEO will “bundle together” and handle the back office functions, which cost our clients valuable time and money. National PEO administrates for its clients, the following essential services:
Payroll Processing, Payroll Tax Filing, Worker’s Compensation Insurance, Health Benefits (Group Medical and Dental Insurance), Employee Benefits Package (e.g. 401k, Retirement Plans, and Section 125 Cafeteria Plans), human resources issues, employee handbooks, Immigration I-9 requirements, W-4 Forms Maintenance, Direct Deposit Services, W-2 Preparation and Reporting, Unemployment Claims and Hearings, Worker Compensation Claims, Wage Garnishments, compliance with government reporting and other specialized functions of the human resources Department.
Q. How does utilizing National PEO save money?
A. Upon request, a representative from National PEO will perform a detailed analysis of a potential client’s payroll and human resources departments. These results will be shared with the management of the potential client. An appropriate plan of action will be suggested. Typically, the client will realize significant savings in direct expenditures and additionally, the client will realize further savings by reducing the man hours required to perform certain “back office” functions.
National PEO will cut operating costs by being more efficient in managing the expenses related to the non-core functions that small and mid-size companies find prohibitive in operating their businesses. These savings will be shared with the clients to the benefit of both organizations.
Q. Does utilizing a PEO impact the relationship with our employees?
A. The impact on the existing employer-employee relationship is evident when the client realizes that as a small employer, they may offer large company benefits that would ordinarily not be available. The client maintains the status of employer and the client retains the hiring and firing. No disruption of the relationship will ever be evident.
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