Professional Employer Organizations, or PEOs, can be a powerful ally for small to midsize blue-collar businesses. They provide comprehensive HR solutions, easing administrative processes and creating healthier work environments. From payroll and benefits management to tax administration, PEOs shoulder these burdens, allowing you to focus on what you truly excel at – getting the job done.
What is the impact of partnering with a PEO?
The impact of PEOs on businesses is evident when you look at the numbers. Companies that partner with PEOs grow 7 to 9 percent faster and report 10 to 14 percent lower employee turnover. Even more remarkable, their likelihood of closing down is slashed in half.
PEOs help businesses thrive financially. The average annual ROI from partnering with a PEO is 27.2.
At the same time, PEO clients are also more likely than non-PEO clients to report growth in 2021 (64% versus 45%), according to a report by the National Association of Professional Employer Organizations (NAPEO). The report also found that 71% of PEO clients expect an increase in employees in 2022 versus only 47% of non-PEO clients.
PEOs are a versatile solution, bringing benefits to a wide array of industries. However, specific sectors particularly stand to gain from the specialized expertise PEOs offer. This brings us to the unique challenges and opportunities presented by blue-collar sectors, where the role of PEOs can truly shine.
What can a PEO do for High-Risk Industries?
High-risk sectors such as construction, manufacturing, machinery operation, aircraft maintenance, and materials handling present unique challenges and risks. These industries require a specialized level of human resources support which is precisely where PEOs become indispensable.
For starters, PEOs offer guidance through a complex labyrinth of employment laws, including those related to the Occupational Safety and Health Administration (OSHA), Family and Medical Leave Act (FMLA), and Americans with Disabilities Act (ADA), among others. Essentially, PEOs assist businesses in evading potential legal complications and ensuring compliance with all necessary regulations.
However, the contribution of PEOs is not confined to legal compliance alone. They extend their expertise to a wide array of services tailored to meet the unique requirements of blue-collar industries. From administering workers' compensation and managing payroll to deciphering the complexities of tax deductions, PEOs deliver comprehensive solutions that cater specifically to blue-collar companies.
But that is just the start of the advantages of partnering with a PEO for blue-collar employers.
5 Essential PEO Services for Blue Collar Employers
1. Recruiting Top Talent
PEOs provide a comprehensive solution for recruitment, freeing up valuable time for you to focus on other crucial aspects of your business. Their knowledgeable teams handle the minutiae of the hiring process, from crafting engaging job descriptions and advertising vacancies to conducting preliminary screenings, interviews, and background checks.
PEOs can also deliver flexible staffing solutions. Whether you need short-term staff during peak seasons or permanent employees for ongoing operations, a PEO can cater to your unique staffing needs.
This tailors the recruitment process to your specific needs, attracting the best-suited candidates from a wide range of platforms and networks.
From initiating recruitment efforts and managing paperwork to offering logistical support, a PEO ensures a smooth onboarding process for new hires.
At the end of the day, PEO recruitment services are an invaluable tool for businesses looking to streamline their hiring processes, attract top-tier talent, and stay competitive in today's market.
2. Managing Risk
When potential hazards are part of the daily operations, risk management takes center stage. Ensuring a safe work environment for employees is not just necessary but a responsibility that demands a high level of expertise. A PEO can be your pivotal partner in risk management and shaping a safer work environment.
Risk management begins with the identification of potential risks. These could encompass general liability, workers’ compensation, and employment law. This identification phase sets the groundwork for a comprehensive safety framework that targets the specific challenges of a blue-collar business.
Next, the PEO quantifies the frequency and severity of these risks. This step uncovers the areas most vulnerable to incidents and helps set realistic safety goals.
Once the risks have been identified and measured, the PEO explores various management strategies. These strategies may involve controlling the risks with preventive measures, transferring them through insurance, accepting certain risks as inherent to the business, or altogether avoiding activities that pose unmanageable risks.
The PEO then implements the chosen strategy, introducing a formal and consistent process to manage risk. But the job doesn’t end there. The PEO continues to monitor the strategy's effectiveness, making necessary adjustments to ensure its sustainability and alignment with the company's profitability goals.
One innovative way PEOs have adapted to the evolving needs of businesses is through mobile-enabled safety training. With the help of technology, safety training can be automated and made accessible right at the fingertips of employees. This makes safety training more efficient and ensures that it's integrated into the workforce's daily routine, further reducing the chances of workplace incidents.
3. Providing Pay-as-You-Go Workers' Compensation
In the unfortunate event of a workplace accident, workers' compensation programs step in. These programs, part of a PEO's core services, cover medical expenses, lost wages, ongoing care, and even funeral costs.
When it comes to blue-collar businesses, the specter of expensive workers’ compensation claims can be daunting. One significant injury could lead to substantial financial strain, disrupting the balance of your business operations.
This is where PEOs come into play, offering robust workers' compensation programs to ease both the likelihood and the fallout of workplace accidents.
A unique advantage of partnering with a PEO for blue-collar industries is the ability to adopt the PEO's experience modifier rate (EMR).
Your EMR is the number used by insurance companies to gauge both past costs of injuries and future chances of risk. The lower the EMR, the lower your workers' compensation insurance premiums. Typically, a PEO's EMR is lower than an individual employer's, allowing businesses to benefit from reduced insurance costs.
Beyond managing the insurance, PEOs also eliminate the hassle of annual workers’ compensation audits. No more time-consuming paperwork or the stress of potential discrepancies - the PEO takes care of it all. This simplifies the process and reduces the risk of costly errors or oversights.
Adding to the financial benefits, partnering with a PEO allows businesses to shift from traditional lump-sum insurance payments to a pay-as-you-go model. This means premiums are calculated based on actual payroll, aligning your insurance costs with your cash flow and eliminating the risk of year-end adjustments.
4. Simplifying Payroll and Employment Tax Filing
There is a high diversity in employee compensation structures in the realm of blue-collar industries. You may have hourly workers, salaried employees, contract workers, and more. This brings with it a complexity in payroll and tax reporting that can be time-consuming and daunting for many businesses.
PEOs come equipped with the expertise to handle payroll preparation for all compensation structures. They eliminate the risk of payroll mistakes or worker misclassification that could lead to a loss in equity, tax audits, and even employee legal suits.
But the payroll services offered by a PEO extend beyond just processing paychecks. They encompass a wide range of tasks that streamline your payroll operations. PEOs can handle everything from employee check administration and delivery, to filing W-2’s, and tracking payroll tax deadlines.
PEOs also understand the different taxation rules for contracted, salaried, and hourly employees. During quarterly income taxes, PEOs can potentially save blue-collar businesses money due on behalf of employees by accurately tracking these different compensation structures.
5. Reducing the Cost of Excellent Employee Benefits
The impact of partnering with a PEO extends far beyond administrative assistance and risk management. One of the most compelling advantages is the capacity to boost the range and quality of employee benefits, breaking down the barriers of cost that often hold back blue-collar employers.
PEOs, through their broad network and cumulative buying power, can access premium benefits packages usually reserved for larger corporations. This enables small and midsize businesses to offer their employees various benefits that could be out of reach otherwise.
Comprehensive Health and Retirement Packages
Collaborating with a PEO allows blue-collar employers to provide comprehensive group health insurance plans with manageable premiums. Additionally, they can introduce quality 401(k) plans, empowering employees to secure their futures with robust retirement savings.
Dental, Life Insurance, and More
But the benefits don't end with health insurance and retirement plans. Employers can offer dental and vision insurance through a PEO, a critical yet often overlooked element of comprehensive benefits.
Moreover, PEOs can facilitate access to other benefits like disability insurance, employee assistance programs, and flexible spending accounts. These additional benefits contribute to a well-rounded package that caters to various aspects of an employee's life and well-being.
Zamp HR Case Study: Family-Owned Agricultural Business
Steven Bros chose PEO Zamp HR to streamline their administrative processes and offer attractive benefits to their employees.
By delegating tasks like payroll, HR benefits, and workers' comp, this blue-collar organization increased efficiency by 52%.
The partnership also resulted in substantial savings on health insurance and workers' compensation, reducing overall benefit costs by 11%.
Beyond these tangible benefits, the company developed a strong relationship with Zamp HR, leading to a high level of trust and an influx of referral clients.
These results underscore the value a PEO like Zamp HR can bring to blue-collar employers, whether you are in construction, the restaurant business, or other areas.
The Power of Blue-Collar PEOs
The blue-collar sector can significantly benefit from the strategic solutions offered by a PEO like Zamp HR. By handling HR tasks, providing robust benefits, and optimizing workers' compensation through an improved Experience Modifier Rate (EMR), a PEO can unlock significant efficiencies and financial gains for businesses.
Ultimately, a PEO does more than simplify administrative tasks. It provides the resources and tools to help blue-collar businesses thrive in a competitive labor market.
