Do Businesses Lose Control With A PEO?

May 28, 2019

Do Businesses Lose Control With A PEO?

If you are like most business owners, the subject of partnering with a Professional Employer Organization, known simply as a PEO, has come up a time or two. Your biggest hesitation when considering this for your organization might be a hesitation to lose control. Thankfully, as you will see outlined below, you do not lose control of your business when using a PEO agency as we offer at Consolidated Personnel Services. Read below to learn more:

PEO’s Can Change The Way Your Employees Can be Classified

One reason business owner’s think they are losing control when partnering with a PEO agency is the fact that many times PEO’s “share” employees, allowing the PEO to become the “employer of record” for payroll and tax purposes. However, some 180,000 business and counting currently use PEOs and can attest to the fact that not only does partnering with such an organization not make them lose control, it actually has given them a renewed vision and greater sense of control over their business than ever before.

The Service Agreement

As mentioned above, the fact that the PEO will become the “employer of record” for payroll and tax purposes sometimes bothers business owners, and perhaps you can relate. However, there is no need to fear because you are still considered a “common-law employer,” which means you retain all the actual legal control of your employees. You still set your employee's schedules, determine their job classification and tasks and handle the aspects of your business outside of the human resource realm.

Helping You Control Your Business, Not the Other Way Around

According to many businesses who have joined successfully with a PEO, instead of your business controlling you, this type of service helps you regain control now lost. If you are like most business owners, as your business becomes more and more successful the management aspect, such as payroll and human resources becomes more and more burdensome, making it difficult to stay on top of regular everyday matters. As a result, you tend to lose control over these elements of your business. The following is a breakdown of ways that PEO’s help you reclaim control over your busy, growing business:

  • Helps You Focus on The Most Important Elements: As mentioned above, running a thriving business can become overwhelming. You can no longer focus on just your service or products. Instead, you have to worry about worker’s compensation taxes, human capital needs, workplace safety programs, HR compliance and much, much more. PEO’s join your team and take care of many human resource related needs, such as taxes and payroll, allowing you to focus once again on what matters the most to you.
  • Provides You With a Bigger Scope: Because you are burdened with so many tasks when running a business making sure to pay and/or file taxes, such as worker’s compensation taxes, can sometimes get pushed to the back burner or becomes outright overwhelming. Let’s look at a scenario in which a PEO service would be invaluable. Assume you notice an uptick in complaints about HR, you also are faced with an increase in worker’s compensation rates, healthcare costs and unemployment rates. This all is in addition to the everyday elements you need to stay on top of to run a successful business. Let’s then assume you reach out and join forces with a PEO agency like ours at Consolidated Personnel Services. Now, you can see the big picture as we will help you find solutions to your human capital needs and ensure your HR is industry compliant. You are no longer mired down in the details of running a business.
  • Increase Your Cashflow: When a PEO takes over the responsibility of your worker’s compensation, unemployment, health benefits, taxes, and employees’ payroll, your cash flow will increase. Your state will view your PEO as a “co-employer.” Since you can utilize the co-employment relationship, you will qualify for reduced tax rates and pay less money towards premiums than you would pay without a PEO. This will give you extra cash on hand, which you can use to invest in equipment or into your employees or other elements of your business.
  • Gives You Total Control: Although it has been mentioned numerous times already, it’s important to once again point out, that you will not lose control when you partner with a PEO. Instead, you will be given the freedom to act as you wish. PEOs simply cut through the confusion and simplify the process. You can have as little or as much control over the elements of your business as you wish. If you don’t want to perform the unpleasant task of letting an employee go, you don’t have to, the PEO can handle it. If you don’t want to make decisions about employee retention programs, no problem. However, if you do, you can. Simply put, PEO’s simply make your business stronger, safer and simpler and more efficient.

In conclusion, making the choice to partner with a PEO will most certainly not take control of your business out of your hands. Instead, it will do exactly the opposite. In fact, some have described a PEO as an HR easy-button, or human resource easy-button. In general, you can expect help with HR and payroll, benefits and employment risk control when joining forces with a company like ours at Consolidated Personnel Services. As a business owner, you must consider the value of your time. Are you committing too many hours towards the tasks listed above? If so, what is that time pulling you away from? When you consider these aspects, it’s easy to see how partnering with a PEO can restore control to your hands as a business owner, not remove it.

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