A Professional Employer Organization (PEO) offers your company countless benefits. Several unique advantages of a PEO are only possible thanks to co-employment. Through co-employment, your business can save money while increasing your employee's efficiency and productivity.
How Does Co-Employment Work?
Co-employment occurs when two companies share rights and responsibilities as an employer. You retain control over your employee's job duties, discipline, and hiring decisions. The PEO manages HR and personnel functions such as payroll and benefits administration. Through this partnership, your business gains access to the PEO's employee benefits plan and workers' compensation insurance premiums and e-mod rates.
With co-employment, your PEO will be listed as the employer on your employee's W2 forms, for legal and tax filing purposes. But this has absolutely no bearing on your ability to make the day-to-day decisions over how your business operates, including hiring and firing decisions.
The PEO may handle many items, most of which your HR team will be happy to unload. These duties may include:
- Employment relations compliance
- Payroll processing
- Issuing W-2 forms
- Payroll taxes
- Benefits administration
No matter what items you choose to outsource to a PEO, you always retain control over your employees and their job duties.
How Can Co-Employment Save Me Money?
You can provide your employees with a more affordable benefits program through a PEO. Because the PEO is the employer of record for all of its clients, the PEO can purchase group plans with economies of scale. That means Fortune 500 benefits at Fortune 500 prices.
Co-employment also gives your business access to the PEO’s workers’ comp premiums and e-mod rates. That can mean major savings depending on your industry.
Small businesses that partner with a PEO grow nearly 10% faster than other small businesses. This happens because small businesses save money and cut costs by utilizing a co-employment partnership with a PEO. That savings can then be reinvested back into your company and your employees, making them more efficient and productive.
Thanks largely to co-employment, the average PEO has an ROI of 27.2%.
The Co-Employment Advantage
Developing a co-employment relationship gives you unprecedented service, peace of mind that your business is compliant, and expertise to help your company run smoothly. Through co-employment, your PEO can save you money while granting access to more affordable healthcare and workers comp insurance.
Co-employment provides you the opportunity to attract and retain top-talent in your industry. This happens because you can offer your employees exceptional benefits at reduced costs to you. It is win-win for you and your team.