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How Can A PEO Lower Your Company’s Risk Profile?

How Can A PEO Lower Your Company’s Risk Profile?


No matter the size of your business, managing your company’s risk profile is of the utmost importance. A measure of the threats to which a company is exposed, a risk profile can affect the cost-benefit analysis of all major business decisions. Businesses that represent a higher risk can be a turnoff for investors and customers alike, so it is important to lower risk whenever possible.

By working with a professional employer organization (PEO), business owners can significantly reduce the risks associated with their companies. PEOs often employ experts in accounting, HR administration, employer liability matters, and various other areas of business management. This allows PEOs like Einstein HR to develop comprehensive strategies for risk profile reduction.

Risk-Related Services Offered By PEOs

PEOs offer services in a wide range of fields. Though not all are directly related to risk reduction, there is often a lessening of overall risk when working with a PEO simply because there is a lower risk of mistakes when experts handle human resources and employee management matters.

Services that can lower risk directly include the following:

Regulation Compliance

Both federal and local governments have strict laws regarding how businesses must operate, how taxes must be filed, and how employee benefits packages must be administered. No business owner can be expected to familiarize themselves with all of these regulations, since they must be focused on growth strategies, customer satisfaction, following industry trends, and other matters related to their company’s success. PEOs like Einstein HR can help employers by handling compliance matters involving regulations like COBRA and the Affordable Care Act.

Employee Training

One of the leading causes of increased risk is a failure to have adequate safety procedures at your place of business. PEOs like Einstein HR specialize in human resources administration, and that includes issues such as the development of safety manuals and employee handbooks. By creating these training and orientation materials, the PEO helps to develop a safe and efficient company culture that can lower the number of injuries on the job site.

Workers’ Compensation Claims

A company’s risk profile can be increased by having large numbers of workers’ compensation claims — not to mention the increase in overall costs. By working with a PEO, business owners can use the experience and knowledge of the PEO’s skilled experts to find the right Workers’ Compensation plans and develop effective strategies for lowering incidents. For example, Einstein HR works with several insurance carriers to provide a range of options for client business owners.

Additional Services Provided By PEOs

PEOs like Einstein HR can provide many other services that are not directly related to lowering a company’s risk profile. Still, these services constitute even more reasons that working with a PEO is often a better choice than hiring a complete, full-time, in-house accounting and HR staff. Some of the services that Einstein HR provides are:

  • Payroll administration
  • Recruitment
  • Personnel tracking reports
  • Wage garnishment (such as child support)
  • Drug screening
  • Pre-employment screening

Even though these are not services that are designed to lower risk, they still ease the burden on business owners and often are much less expensive than paying the salaries of an in-house staff.

Co-Employment Benefits

When companies hire a PEO, they enter into a co-employment relationship. Though the term may sound scary, co-employment often reduces the amount of risk held by the business owner. There are several benefits to signing a co-employment agreement.

Heightened Stakes for the PEO

When a client business signs a co-employment agreement, the PEO becomes a co-employer of that company’s employees. This does not take agency away from the business owner, but it does mean that the PEO has a significant stake in ensuring that compliance is handled appropriately. As a co-employer, the PEO assumes some of the risks associated with the services it provides, effectively lowering the amount of risk shouldered by the client business.

Better Benefits, Lower Turnover

Another important facet of co-employment is that a PEO can be involved in a co-employment relationship with several client businesses at once. Since the PEO is considered a legal employer of all of those employees, this means that the PEO’s employee pool is substantially larger than that of any single company.

A larger employee pool means that the PEO can spread the cost of employee benefits packages out more, providing higher-quality benefits at a lower individual cost.This often saves client businesses money on employee turnover, as workers are less likely to leave when the benefits are so good. In fact, the National Association of Professional Employer Organizations has found that businesses who work with PEOs experience anywhere from 10% to 14% lower turnover rates.

Start Reducing Your Risk

If you are a business owner, fill out the form on Einstein HR’s contact page or call us at 770-962-1700 to start reducing your risk today. We offer a la carte service selection as well as total HR and accounting services, so you can pay for wholesale outsourcing or for the exact services you desire.

Founded by veterans of the HR outsourcing industry, Einstein HR has decades of experience and was recently named to the Inc. 500 list of the fastest-growing private companies in the nation. We are a PEO you can trust to lower your risk and provide you with the services you need to grow your company and maintain your standards.

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