Co-Employment: Popular for a Reason
If you’re like most small business owners, you don’t relish the thought of hiring either your first (or an additional employee) due to the time-consuming administrative tasks involved with recruiting, interviewing, and onboarding new employees. Add to that the hassles of payroll, benefits administration, and laying off or firing employees, and it’s easy to understand why more than 150,000 small businesses in the U.S. use PEOs to take advantage of the unique co-employment model PEOs can offer to their clients.
A PEO differs from traditional HR outsourcing companies because their employee leasing model allows the PEO to “own” hundreds of thousands of employees across thousands of businesses in the United States, thus driving down health insurance costs and making HR standardization an easy process. In so doing, small business owners have access to a variety of Fortune 500-level benefits, standardized HR policies and practices, unemployment claims and risk management, workers’ compensation coverage, and a vast library of employee training resources and employee discount programs.
One way to think of employee leasing is as a shared responsibility. Once a co-employment model is established, a small business owner is simply sharing risks and responsibilities with the PEO. As a business owner, you know that nothing stays the same for very long. Do you really have time to make sure you are keeping in compliance and making whatever changes are necessary to keep up with ever-changing regulations in employment law? Probably not. But, because a PEO has multiple clients, they are much better equipped to keep abreast of those changes, thus sharing their understanding of employment law with their clients.
For some perspective, consider this: the total employment numbers represented by the PEO industry is roughly the same as the combined number of U.S. employees for Walmart, Amazon, IBM, FedEx, Starbucks, AT&T, Wells Fargo, Apple and Google. According to the National Association of Professional Employer Organization, a total of 3.7 million worksite employees (WSEs) were paid a total of $176 billion in 2017 working for 175,000 different PEO clients. These WSEs represented 12.1 percent of all employment by private sector employers that have 10-99 employees and 2.4 of civilian employment.
Those numbers mentioned above should be enough to compel you to seriously consider the opportunity you have to grow your business even further. Obviously, you wouldn’t consider hiring employees if your business wasn’t growing. When you decided to open your business, it’s probably a safe bet that you didn’t start a business just so you could have an opportunity to handle payroll, benefits, HR issues, and risk management.
Now that you’ve done enough to justify or require additional help, why not take HR-related responsibilities and worries off your plate so you can continue your focus on doing what you truly love to do with your time – whether that be actually making what you sell (or service) or selling what product (or service) you provide. Employee leasing provides you a chance to focus on what you do best and keep your business competitive and profitable.