Running your own startup can take a lot out of you. Besides managing your core operations, you also need to pay attention to aspects such as payroll, benefits, and tax filings. If you fall short of tracking employee time or sort certain information incorrectly, it can create a world of issues for your venture.
That’s where a professional employer organization (PEO) comes in. With its ability to manage the payroll, benefits, and taxes for various industries, a PEO’s co-employment approach can work like a charm for your startup.
If you want to collaborate with a PEO for the organization of your startup, here’s a lowdown on these helpful entities. By keeping these 5 tips in mind, you can get the most out of your PEO partnership.
1. Understand That a PEO is More Than an Outsourcing Solution
A common misconception is that PEOs are business process outsourcing (BPO) solutions that simply handle the day-to-day payroll needs for a business. This is not entirely true.
While a PEO does handle your business’ operations such as payroll, they do so as a co-employer that manages your team and brings more benefits to the table. Partnering with a PEO also lets your workforce be shown as the employees of the PEO on record.
If you are comfortable with this arrangement, you can ask your chosen PEO to become more of a partner than a subcontractor for your startup. With that being said, you can easily retain the ability to manage your workforce’s front-end operations with the level of interaction and research expected from a startup.
2. You Can Choose Your Preferred Type of PEO Arrangement
When you enter into a co-employment agreement with a PEO, you can rest assured that you won’t have to perform activities such as payroll processing and tax filing.
But that’s not all. Some PEOs can also handle compliance, audits, and human resources (HR) support. This makes them capable of handling a slew of tasks at once.
With this in mind, you should decide what type of responsibilities you would like your PEO to fulfill. This gives you the flexibility to delegate only those tasks that seem difficult for your startup’s capacity. This allows you to save your expenditure on startup security and invest it in your startup’s office decor instead.
3. They Can Also Handle Tax Filings
PEOs are known for exceptional management of back-office operations, including tax filings. That’s why it’s common for a PEO’s default offerings to include tax management along with payroll processing.
This particular quality ensures that you can stay on top of your tax filings without hiring additional accounts support. This also saves your operational costs in the long run and lets you grow your startup in an efficient manner.
Once again, it is important to remember that when you partner with a PEO, your workforce is shown as the PEO’s employees for tax filings. But if you maintain clear communication during your agreement, this doesn’t cause any operational issues. For future references to the agreement, you can save its hard copies in a document holder.
4. They Can Manage Your Recruitment and Training Needs
Full-service PEOs also go a step beyond, and offer recruitment and hiring services to find the right candidates for your job postings. This saves you from hiring an expansive recruitment team.
Some renowned PEOs are also known for handling the training and development of new talent. This allows you to execute efficient onboarding processes without a significant investment.
Once again, you can speak about these requirements at the time of partnering with a PEO. This way you can save your costs and spend them on elegant office decor to add some visual character to your startup.
5. They Can Take Care of Insurance and Benefits
By classifying your staff as their own workforce, PEOs and their co-employment arrangement open new doors of opportunities for your team. This includes accessibility to insurance and benefits that would otherwise remain unavailable.
As a result, your startup can offer compelling benefits to your team without having to invest a large number of funds in such programs. Instead, the costs are covered by your co-employment agreement that typically comprises a percentage of your payroll.
If you want to avail these benefits, you should look for a PEO that offers these capabilities from the get-go. This ensures that you are able to get the most benefits out of your PEO arrangement.
By keeping these tips in mind, you can find a PEO that suits your needs while also giving you the maximum value for your funds. This lets you focus on scaling your startup while also ensuring that your back-office operations are handled by qualified professionals.
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