Another value-added approach to reaching more insureds… and more revenue.
Professional Employer Organizations (PEOs) enable clients to outsource their employee-related business functions — including human resources, employee benefits, payroll and workers’ compensation — so they can focus on their core businesses. For smaller enterprises in particular, offloading the increasing complexity and regulatory burdens and risks of HR-related operations to an outside provider can offer real benefits in terms of productivity, profitability and value.
For workers’ compensation, a PEO can quote risks which would be difficult and/or more costly in the voluntary market… allowing independent agents additional freedom to reach a broader base of insureds.
How will PEO help your clients controls costs?
PEOs offer economies of scale: while clients retain control of their core businesses, the PEO acts as a “co-employer,” in essence pooling their employees with those of other companies to leverage better pricing, coverage, etc.
Aside from potentially lower insurance premiums, the PEO helps clients avoid costly “year-end surprises” after workers’ compensation audits. Because they manage payroll and other HR functions, they can provide more accurate “pay as you go” information to prevent unexpected extra premiums due at year-end.
In addition, PEOs can reduce hiring overhead, provide expert guidance regarding compliance issues, reduce liability, offer more sophisticated time-saving technology and, in general, free clients from HR department costs and headaches. By offering more high-value employee benefits, PEOs also help employers retain high-performing employees and attract new ones.
How will PEO help your clients’ employees?
A PEO is better able to provide the HR services employees want: clear lines of communication, improved job security through detailed employee manuals, training, safety services, efficient payroll and a wider array of employee benefits such as 401(k) plans, insurance, disablity, HSA plans, etc.