Five Ways A PEO/ASO Can Save Your Company Money

posted on Sep 01 by admin in the Human Resource Administration category

Labor costs taking too much revenue? A PEO/ASO can save your company time and money.

A professional employer organization (PEO) and administrative service organization (ASO) are organizations that provide services for your human resources, payroll and employee needs. Providers vary in size and stature, but should all specifically focus on your company’s and employees’ needs. They are a team of qualified human resource personnel, who take on many tasks specifically designed to increase in-house efficiency. A PEO/ASO even can take care of workers’ compensation and other important time consuming tasks. By outsourcing these responsibilities to an external organization, your company could save a large sum of money.

1. Simplify The Hiring Process

A PEO/ASO will save your company money by speeding up your application process. Most small companies do not have a dedicated human resource staff to evaluate new employees. This causes current staff members to evaluate new employees, a situation that is less than ideal. The current staff member will be less adept at judging new applicants than qualified human resource personnel. Also using current staff members to evaluate new employees will divert them from their daily tasks. A PEO/ASO doesn’t actually tell you which employees to hire, but will save time by refusing any applicants that don’t meet your minimum requirements. A PEO/ASO will take on the front end of your hiring process and help bring qualified personnel to your door.

2. The Best Deals In Workers’ Compensation

Another great way a PEO/ASO will save money is through workers’ compensation insurance. If you are running a relatively low risk business, you may not need to worry much in this area. However, if you are running a high risk business, like construction, then a PEO/ASO may be a huge benefit to your organization. PEO/ASO’s can save costs on workers’ compensation insurance. They can provide this because of two reasons; they are providing insurance at high volumes and may get better rates, and they often have a working relationship with carriers, medical providers, and claims departments.

3. Employee Benefit Administration

PEO/ASO’s are organizations that will manage the complex world of employee benefit administration from the simple functions of collecting the necessary premiums to remit monthly payments to the carrier, to monthly invoice auditing and billing reconciliations. Most importantly, COBRA administration has gotten substantially more complex with the passing of the Stimulus Package making complying with regulations even more difficult. Having an outside organization for these issues will save a considerable amount of time (and likely money).

4. Say Goodbye To Payroll Processing

Another way a PEO/ASO can save your staff time is by taking care of payroll and administration services. PEO/ASO’s can prepare and deliver payroll to your employees, as well as, take into account the necessary taxes. These taxes include Social Security, Medicare, FIT, SIT, FUTA, SUI and others. Your PEO/ASO can manage vacation and sick time accruals as well. Moreover, your PEO/ASO prepares and files all of your quarterly and annual reports, FICA, FUTA, and SUTA, W-2s, etc., freeing up more time for your employees to focus on their core responsibilities.

5. Outsource HR – The Easy Way to Resolve Disputes

By outsourcing employee issues such as compensation, payroll, unemployment claims and other problems you will save yourself a ton of headaches. Furthermore, by adding a third party that can help in any disputes between an employer and the employee, you will be providing an easy way to resolve any issues out of house. Not having to deal with these kinds of issues in-house is enough of an incentive for many companies to use a PEO/ASO.

These are five great reasons a PEO/ASO could save your company a substantial amount of money. By outsourcing many tasks to another organization, you will be decreasing your liability, as well as, the amount of on-site employees you have in your business, reducing labor costs. Not every PEO/ASO is the same for the best fit for your company. Click on the link below to learn important details you will want to know before hiring a PEO/ASO.

Go here for more on PEO and ASO services.

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