Full-Service HR

Three PEO Myths Debunked

Ella Baker
Separating fact from fiction
Reading time 5 Mins
Published on May 28

Separating fact from fiction

With all the myths about professional employer organizations (PEOs) abounding, it can be difficult to separate fact from fiction. A little research and a consultation with a quality PEO representative can put your mind at ease and clarify any lingering questions you may have about the co-employment relationship with a PEO.

Myth 1: I will lose control of my business.

It’s understandable that you may be hesitant about entering into a co-employment relationship, believing that you will have to give up some control of your business. The truth is that your PEO partner works for you, not the other way around.

Your PEO will handle the HR administrative duties of your company and keep you compliant across the board, freeing up valuable time for you to take care of day-to-day business operations and to focus on growing your company. Instead of worrying about payroll or looking up new insurance regulations, you can do what you do best and let your PEO handle the rest. You remain a co-employer with the PEO, meaning that cost burdens and liabilities are shared across both companies.

Your PEO partner will honor your vision for your business while handling your payroll and human resources administrative tasks. You handle the revenue producing activities, while your PEO finds solutions that will result in cost reductions, employee retention, and better benefits for your employees.

Myth 2: I won’t be able to make hiring and firing decisions for my company anymore.

When outsourcing human resources administrative duties, it is a common misconception that you might be losing some or all control of the hiring and firing decisions of the company. This couldn’t be further from the truth as your PEO partner is there to assist you in finding the right candidates and in helping you and your management staff with understanding the compliance issues related to your daily management of your staff.

Your PEO can provide recruitment assistance when you have openings that need to be filled. A PEO learns about your business and industry, then develops recruitment plans that attract and identify candidates with the right skills and that fit within the established company culture. From helping you identify the skills and personality traits that need to be embodied by new employees to helping you develop onboarding procedures, your PEO will assist you in identifying top candidates, but you will always have the final decision about who is hired by your company.
Additionally, your PEO will work with your supervisors and yourself on the skills necessary for daily management of employees and help you develop progressive discipline strategies that keep your company compliant. Your PEO partners will help make sure that your company is following all established HR compliance and regulatory requirements, helping to avoid potential wrongful termination lawsuits. When you and your supervisors decide to end an employee’s term of service, you will have the final decision about who is terminated by your company.

Myth 3: A PEO is expensive and won’t save my company money.

The fees associated with entering into a co-employment relationship with a PEO may have you believing that your company won’t see any cost savings or an adequate return on investment from the partnership. In fact, with the economies of scale and liability protections a PEO provides, in most cases the arrangement is effectively cost-neutral, sometimes even less expensive, than managing compliance and HR duties on your own.

Due to their size and the employee base they represent as the employer of record through the co-employment relationship, PEOs are able to receive cheaper insurance rates for your employees than you would be able to obtain on your own. These deep discounts aren’t available to most small businesses as their employee bases aren’t substantial enough to qualify. Additionally, you won’t have to allot time in your or your supervisors’ busy schedules to administer the plans as the PEO will handle those tasks for you – freeing you up to invest more time in critical business activities.

Your PEO provides a full complement of employment related services, including

• HR Management
• Benefits Administration
• Payroll Processing
• Time and Labor Management
• Tax Administration
• Better rates on Worker’s Compensation
• Safety and Risk Management
• Employee Relations Support
• Ensure ACA Compliance
• Ensure Labor Law Compliance

The expertise in providing these services that a PEO is able to offer means less time spent researching benefits for your employees, cost containment of workers’ compensation insurance and claims, time and money saved dealing with compliance issues, less time spent on payroll administration and tax compliance, and, best of all, increased employee retention. Through economies of scale, increasing your company’s efficiency, and helping you grow, PEOs are often able to produce benefits that far exceed the cost savings that they offer to your company.

Let Sheakley debunk even more myths for you

Accredited by Employer Services Assurance Corporation (ESAC), Certification Institute, and backed by a $3 million Employment Practices Liability Insurance policy, Sheakley’s 120 years of combined PEO experience and expertise are unrivaled in the industry. As your company continues to grow and become subject to more stringent labor laws, Sheakley’s PEO services allow you to remain compliant and focused on the daily demands of your business.

Learn more about Sheakley’s PEO team and contact us for your free consultation today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.

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