How a Small Business Can Offer Fortune 500 Benefits
There is nothing more annoying for a small-business owner than to go through the interview process with numerous employee candidates, narrow it down to one outstanding prospect, and make an offer -- only to find out they are going with a larger corporation because of a more favorable benefits package.
But by using a Professional Employer Organization, or PEO, a small-business owner can easily and cost-effectively offer employees the same type of benefits normally reserved for a Fortune 500 company.
How PEOs Work
When you sign up with a PEO, in essence you are bundling your employees with those serviced by the PEO. So for example, if you have only six employees, you are now combining them, for benefits purposes, with tens of thousands of other employees from hundreds of other companies.
%VIRTUAL-pullquote-PEOs bundle your employees with tens of thousands for better rates and packages that are competitive with larger corporations.%This scale allows the PEO to negotiate with health care providers for better rates and benefit packages, and it enables you to offer your employees -- all six of them -- plans that are competitive with larger corporations.
Some PEOs also have travel services with pre-negotiated airline, hotel, and merchant discounts your employees can take advantage of.
Say, for example, that one of your employees wants to take a summer vacation with family. The PEO's customer service representative can book the tickets and hotel room for them at a discount from advertised rates. The PEO can also arrange it so the cost of the trip is broken up into fourths and then automatically deduct it from the employee's next four paychecks.
PEOs can also set your employees up with 401K plans and offer access to retirement planning professionals at no cost.
As a small-business owner, PEOs have the added benefit of handling payroll processing and HR services. PEOs will even come into your offices to review your company's employee handbooks and safety practices and suggest updates or revisions if needed.
Of course, nothing in life is free and a PEO will charge you a fee for its services. This is generally a set percentage of your total payroll. But that fee is minuscule compared to the ability it gives you to offer a wide array of benefits to your current and future employees.
Brian Lund's blog offers more on small business, the stock market, investing and the secret to eternal life.