Hiring a professional employer organization, or PEO, has become a very popular option for small and mid-size businesses that need help managing the wide range of administrative tasks.
This is why you neeed to know more about the Professional Employer Organizations. We show you how to delegate the administrative stuff to PEO service provider so you can stay compliant at all times.
A professional employer organization (PEO) is a PEO service company that provides comprehensive HR solutions for small and mid-size businesses. These services include PEO Payroll, benefits, PEO HR, staff outsourcing service, tax administration, and regulatory compliance assistance. The return on investment of using a PEO, in costs savings alone, is 27.3 %.
When a client company makes a contract with PEO, it creates a co-employment model which also involves a worksite employee of the client company. Briefly — PEO is a co-employer that provides services for both the employees and the client company.
It’s important to note that business owners retain complete ownership and control over their enterprise at all times. The exact scope of tasks and obligations business transfers to PEO resides in the contract.
PEO will handle workers’ compensation (workers’ comp), compliance and payroll taxes, record keeping.
PEOs have employees which specialize in law, and keep an eye on changes in the law that might affect the client company.
PEOs can help you find skilled employees who are a perfect fit for your company. Moreover, they plan out the whole recruiting process from a job description, posting, and interviews.
PEO can also help your existing, internal HR team manage the administration. Their support may come in various shapes, some of them being employee onboarding/ termination, employment verification, etc.
Some only cover the basics, while others handle more than just HR administrative tasks.
PEO is an employer of record for tax purposes only. It cannot make independent decisions tied to the client’s business — this includes working hours, schedules, and salaries. Additionally, PEO doesn’t intervene with sales, marketing, and distribution.
When you decide to sign a contract with PEO, you have no responsibility for its workers.
The main difference between PEO and Employee Leasing Company (ELC) lies in their relationship with the workers and their job permanence.
PEOs only provide services for client companies and existing workers of that company. Once the contract between PEO and the client company is terminated, employees stay with the company, but their ties with PEO stop existing. They usually don’t provide the company with a supply of new employees.
On the other hand, employee leasing companies provide the company with new workers, usually for temporary projects. After these employees complete the work for the company, they head back to the ELC which assigned them with these short-term jobs.
Temporary Staffing Service is also worth mentioning — similar to ELC, they provide client companies with additional staff. Temporary Staffing Service recruits the workers for companies in special situations, such as seasonal shortages, temporary shortages of employees with specific skills, or when full-time employees are absent.
The most visible benefit is that you can focus your resources on business development.
These are some of the advantages:
Depending on the business model you are either charged a fixed fee per employee or a percentage of the salary. It can sometimes be had to assess the ROI and see whether or not the PEO services are worth it for your industry, type of employment. etc.
The rules for searching for the right PEO and HR professionals on the market are similar to the rules for making strategic partnerships.
Pick the PEO that has a good reputation and good track record, which is stable, provides the services that match your needs.
The professional team of Horizons Bulgaria will hire the people and will lease them to your business. Horizons Bulgaria is a licensed peo company in staff leasing services according to the last changes in Labor Code and holds a license for Temporary Staffing Agency.
We will take care about documents, social payments and institutions – You will pay us the salary, securities and our comission as a single amount.
You will save your time for the important business issues and give us a call to learn more about the Staff Outsourcing Service in Bulgaria and how your business can benefit from it!
There is a lot to consider when determining if a PEO is right for your organization. The services you receive from a PEO are different from an HR and payroll provider, so weigh your options carefully with the needs of your company. PEOs offer companies of all sizes a cost-effective way to handle HR administration. Business owners can join them to the in-house HR team, or let PEO take care of it on its own.
Sources: 1) https://www.business.com/ 2) https://www.napeo.org/what-is-a-peo
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