Outsourcing to increase revenue: Cost-effective benefits of a PEO

The National Association of Professional Employer Organizations defines a PEO as a solution that “[enables] clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation, so they can focus on their core competencies to maintain and grow their bottom line.” With costs to consider, and with employee health benefits reaching new heights of complexity, having an outside source who is a subject matter expert can help a company realize huge labor and time savings. For example, saving an already overworked staff from having to dive even deeper in the areas of employee benefit reporting is a huge boon.

Still, there can still be some resistance to PEOs. According to Owner’s Oasis, a PEO consulting firm, there are several “myths” regarding PEOs.

The cost of PEOs can be one area of concern to new users. Remember, PEOs are not only payroll providers, but provide a full level of employment-related services. While the cost of these additional services amounts to more than a payroll vendor, a company can experience significant savings when they join with a PEO, such as the employee benefit savings related to the health costs picked up by the PEO. Efficiencies are also realized, as a company’s employees can now do what they do best, while letting the PEO show its expertise in the areas of tax and benefit compliance.

Workforce control is another area of concern. However, in reality, companies must know they still call the shots. Hiring, firing, merit raises -- all these employee-related responsibilities are left up to you. A PEO takes care of the administrative responsibilities so you can focus on the job at hand.

Another myth, according to Owner’s Oasis: Because many people are unfamiliar with PEOs, they tend to lump them in with typical payroll providers. While a PEO does take care of payroll, it also assumes the risks involved in the employment process, which is far more risk and responsibility that a typical payroll company would assume.

A PEO can save a company a considerable amount of time and resources. For more information on how these cost savings can apply to you, visit us at plexusgroupe.com.


What is a PEO?” National Association of Professional Employer Organizations.

"Four Common Myths About PEOs in North Carolina." OwnersOasis.com.