Myths and Facts of PEOs

Myth #1: PEOs are Expensive

Fact: A PEO is often less expensive than maintaining your own human resources department. What’s more it can save you thousands by eliminating fines most businesses pay for errors in reporting, and the costs involved in lawsuits. Now add the productivity improvements from a workforce that receives great benefits and training. Finally, consider that the average business owner has 147 tasks related to being an employer. Do you want to spend your time on exhaustive, unproductive paperwork or on strategy, operations, business development? What’s the value of your time?

Myth #2: I’m Too Small (or Large) for a PEO to Make Sense

Fact: Most PEO clients are between 20-200 employees, but PEOs can partner with companies that have 500 or more employees and add capacity to their existing HR team, allowing them to focus on strategic issues while the PEO focuses on HR administration.

Myth #3: My Employees Will Be Confused, or Will Resist the Change

Fact: Once your employees understand that they will be receiving better benefits, they will easily embrace the change. Hiring the right PEO actually increases employee morale and reduces turnover.

Myth #4: I’m Giving Up Control of My Employees, Including Hiring and Firing Decisions

Fact: You decide who to employ and who to let go. A PEO can provide crucial recruitment assistance, finding you the candidate who fits your culture and has the right skills. When it comes to firing, your PEO will train supervisors on performance management including discipline and documentation, protecting you from future lawsuits. What you are giving up is the back-office administration of having employees.

Myth #5: My Current Staff Can Do Everything a PEO Can, and It Won’t Cost Me Extra

Fact: If you’re like most employers, your HR staff is spending most of its time on employee recruitment and discipline. Strategic projects, like consolidating all employee information to streamline operations never makes it to the top of their plate.

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