Why Professional Employer Organizations - PEOs are in Demand

The Professional Employer Organization (PEO) industry’s primary market is businesses with 5-2500 employees. PEOs are in demand because:

• Business must comply with over 60 different employment-related governmental regulations. These obligations are beyond the ability to be done cost effectively by most mid-size businesses.

• Insurance providers charge small and midsized employers more for employee benefits than they charge larger employers. In addition insurance agents who are paid on commission are not interested in pursuing these smaller companies.

• Small and mid-sized businesses are substantially underserved by the insurance industry for workers’ compensation insurance. While required by law in all states (except Texas) many companies find that coverage is difficult to obtain and the cost of coverage to be exorbitant when available. PEOs provide work comp coverage and allow business to eliminate up-front fees and deposits. In addition PEOs provide guidance for improving workplace safety and managing workers’ compensation claims.

• Small and mid-sized businesses are at a major disadvantage in competing for talented employees because they typically cannot afford the cost and complexities of obtaining and administering a comprehensive health insurance and employee benefits package. PEOs allow cost effective access to an array of employee benefits that may be otherwise difficult to obtain.

Because a PEO offer relief from many of these business related challenges, thousands of companies across the USA are now using a PEO to help make their business more successful. If your company decides not to use a PEO, consider this.

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