August 12, 2014 | 4 minutes read( 633words)
Guest post contributed by Rodney Steele of Dinsmore Steele.
Businesses are created every day to fill a void in the marketplace with either a product or a service that hopefully generates revenue for its creators. In theory it sounds exceptionally easy — but it isn’t.
However, each and every company starts the exact same way. If you think about it, every company that has ever been created was at one point a startup. Where the company ends up is in large part due to the decisions its founders, executives, and other key stakeholders make.
In order to remain in business, profits are imperative. In most cases that will require you to take on employees. The desire to attract and retain the best talent coupled with the various state and federal regulations, means you need systems in place to manage payroll, insurance, and HR support/service.
Most companies outsource payroll to ADP or PayChex, use an insurance broker for their insurance needs, and handle HR in-house.
While that can work, it’s cumbersome and leaves the onus of management on business owners. Payroll is important to everyone, but still needs to be entered, taxes filed, and so on. Insurance has always been by nature a cluster of confusing wordplay and often just foolishness — leaving business owners negotiating renewals, comparing plans, and crunching numbers. HR is subject to a myriad of state and federal regulations that seem designed to confuse and bewilder, often resulting in fines.
A possible solution? A Professional Employer Organization (PEO). While they aren’t yet a part of everyone’s vocabulary, PEOs are growing in popularity with businesses. Their sole purpose is to streamline, drive value, and save client’s money. They boost efficiency by presenting a single source solution that companies rely on to keep costs low through group buying power.
In order to help clarify the decision process, we have assembled a list of when you might want to consider using a PEO.
1. Payroll — Use a PEO to process your payroll, file your 940/941s, process W-2’s, and manage state and federal taxes on your behalf. PEOs will collect and file I-9s and W-4s for each employee, making sure they're up to date.
2. Insurance — PEOs can offer access to top tier medical, dental, vision, disability, and life insurance from the best carriers in the nation. They also offer Workers’ Compensation insurance from AAA-rated carriers, convenient pay as you go plans, reduced rates, and modification rates. Best of all, they handle all claims, renewals, administrative details around COBRA, and all other insurance related issues for you and your employees.
3. HR — HR compliance is vital to staying in business. The U.S. is by far the world's most litigious society. Most companies are one to two lawsuits away from being out of business — Knowing how to handle problematic situations, constructing a sound and viable HR infrastructure, creating policy handbooks, offer letters, and managing recruiting are daunting tasks that require skill and expertise. A PEO can handle all of that for you.
As with every solution, not all PEOs are created equal. Solutions and pricing options vary widely, but their overall value proposition is significant.
Rodney Steele is Dinsmore Steele’s Chief Executive Officer and Founder. In addition to having extensive knowledge of financial markets and human capital, he is a serial entrepreneur with a background in creating, launching, and building disruptive companies that add value. He founded Dinsmore Steele to address inefficiencies in the way companies purchased their human capital solutions, ultimately creating a single source platform that enables clients to comparison shop across the range of marketplace offerings.