In today’s challenging economic environment, business owners have to look for ways to increase efficiencies while reducing expense.
As we continue to try to stimulate the economy with implementation of small business, one of the most expensive and frustrating aspects for small business owners is understanding and complying with employment laws.
Along with the statutory requirements to provide workers’ compensation benefits, employers today are also faced with a gamut of other employment-related challenges such as ADA, ERISA, benefit requirements, not to mention hiring practices.
In recent years, there has been an increase in employment practices lawsuits which are not only frustrating, but expensive to defend. For most small business owners, the decision to go into business themselves surrounded a dream and special talent as well as an entrepreneurial spirit.
Most small business owners are not insurance experts, nor are they employment law attorneys. While the cost of workers’ compensation insurance has dropped significantly in the past several years, insurance is an industry that cycles up and down and employers are generally at the whims of those market cycles, making it unpredictable to budget into their business model.
Defending employment practices claims can cause a small business owner to go out of business if they don’t have insurance to protect themselves.
One solution to the increasing challenges presented to most businesses is utilization of aProfessional Employment Organization, or PEO. A PEO provides services such as payroll administration, workers’ compensation, safety services, human resource management, along withemployee benefits, if desired. By entering into a contractual co-employment relationship, business owners can transfer or outsource most of, if not all, of their human resource issues to experts and focus on the business itself.
A PEO can be a more competitive way to manage those aspects of the business. PEOs have been around for years and there are many different companies out there.
Some focus on payroll services with human resource services and products added on an á la carte basis while others are large publicly trades companies that offer profit sharing to their clients.
Most business owners approach their insurance program renewal dates dreading the process and results. It takes time and energy to evaluate the many options — time that could be better served focusing on the business of business.
PEOs often offer increased cash flow by eliminating deposit requirements, stabilizing expenses while eliminating the need for the annual renewal process and removing the cyclic nature of the insurance industry allowing business owners to better plan and budget these types of expenses.
In today’s challenging business economy, one alternative might be the use of a good PEO. To learn more about a Professional Employer Organizations, go to www.napeo.org.
By Andre Olivan
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