Dara’s business grew seemingly overnight. Within a few months, she went from a team of three working in their own homes to an office with more than a dozen people. As she worked to recruit more qualified staff to run her quickly growing company, Dara realized she needed to offer more competitive benefits. Without them, she couldn’t get top talent to say yes to her offers.
Her company was still relatively small, though, a fact that created a burden on the benefits budget. Dara’s team wasn’t a large enough pool to allow access to lower-cost health insurance and other benefits.
After weeks of research, Dara stumbled on an ideal solution to her issue: She learned how to save money with a PEO. Discover more about how to save money with a PEO below.
If you’re not sure what a PEO is or want some more information about what services they offer, find out more from America’s Back Office.
5 Tips for How to Save Money With a PEO
1. Reduce the Cost of Health Insurance Benefits
According to the Bureau of Labor Statistics, almost 90 percent of those employed in private industry have access to employer-sponsored health insurance plans. Small businesses that don’t offer these types of benefits can experience a disadvantage when recruiting.
But even if you bite the bullet and splurge on employer-sponsored healthcare, small and midsize businesses often don’t have enough employees to qualify for the best or most cost-effective plans. Unfortunately, health insurance is a numbers game. The more people who are insured with — and paying premiums into — a plan or network, the lower the risk for the insurance provider. That’s one reason smaller groups cost more to insure.
Partnering with one for benefits is a great option if you’re wondering how to save money with a PEO. A PEO saves you money because it ensures your business is part of a larger group. When PEOs shop for health insurance options, they do so by presenting groups of businesses together. That drives up the number of employees entering into the plans.
Ready to drive down benefits costs while improving the packages you can offer employees? Find out more about how America’s Back Office can help you lower the cost of health insurance benefits.
2. Streamline Administrative HR Tasks
When your internal HR staff is handling every tiny detail of compensation, benefits management, onboarding and other HR tasks, the hours certainly add up. By working with a PEO, you can streamline tedious administrative tasks. That saves you numerous labor hours per week while freeing up internal HR staff, supervisors and leaders to attend to more complex work that increases employee morale and helps teams support quality customer service.
3. Minimize the Risk of Compliance Expense
The maximum cost of an OHSA violation can range from $13,653 to $136,532. That’s per violation, so a business that falls out of compliance and racks up multiple violations could be facing even steeper charges.
And that’s just one type of compliance issue a business can run into. Classifying employees incorrectly, accidentally shorting someone on their overtime pay or asking the wrong questions in interviews are some other areas where compliance issues might occur.
For those looking for how to save money with a PEO, partnering with one to reduce the risk of compliance issues is a great answer. Experienced, knowledgeable PEO staff can provide guidance and set up processes to help your business maintain HR compliance.
Didn’t realize compliance was critical for HR? Find out about more labor laws you should know about and what America’s Back Office can do to help you stay compliant.
4. Drive Down the Cost of 401(k) Plans
Just choosing the type of 401(k) plan you want to offer can be a daunting process. A PEO can help you save time in setting up retirement plans for your employees. As with health benefits, when you’re part of a larger group of businesses, you may also be able to access higher-quality solutions that cost less per employee.
5. Free Up Internal Resources to Drive More Revenue
When you outsource certain HR tasks to a PEO, you free up your internal resources. That gives everyone more time to work on tasks and initiatives that drive more revenue or grow the business. While it’s not direct cost savings, it’s certainly a potential tip for how to save money with a PEO.
How America’s Back Office Can Help
America’s Back Office is a certified PEO. Only three percent of PEOs can make this claim, and certification means we’ve done the work to demonstrate to the IRS that we’re reliable, fiscally responsible and knowledgeable about federal and state tax laws. Contact us to find out how to save money with a PEO by utilizing our experience and expertise.
