How Much Do Professional Employer Organizations Charge And Are They Worth It?

Time and resources are two of the most important components for doing business

. Finding ways to save more of both is the best way to operate effectively. Professional employer organizations or PEOs are useful tools in this process. They work to provide individual businesses with cost-effective ways to out-source their tasks and projects.

In the 1940's this out-sourcing was commonly referred to as employee leasing. By the 70's this was a regular practice of medium to large companies. Today, there are more than 700 PEOs in the United States. These organizations assist businesses in many industries through their services. These services include pay roll work, social security, retirement, and health benefits.

Small businesses across the country have found that they use 7-25% of their time simply doing paperwork. Hiring a qualified professional employer organization can save this time. It can be dedicated to other objectives and the reaching of business goals. The services that these PEOs accomplish are priced separately.

Not every organization will charge the same price for their services. This is one of the reasons that comparing providers is essential. You will be able to look at their services and choose which ones are best for you. Along with these concerns you will be able to decide on a pricing plan that fits your budget. Lets take a look at the different options that are available to you.

Bundled services

The benefits of professional employer organizations can be felt in a short period of time. This is why securing these services is important. One option for this type of plan is bundled services. Here buyers are given several tasks bundled together for one price. The PEO is responsible for doing the work requires for each task. They will also monitor this information for the business. Instead of filing bulk paperwork for your financial records, they will store the information electronically.

Un-bundled services

Some businesses prefer un-bundled services from their PEO. This type of plan allows them to choose which services are best for their business. In these cases, there are some services that are needed. There are other services that may not apply to the type of business. Considering this along with your budget is a good way to select services. If you have a strict budget this sort of pricing may be more economical.

Single-rate services

Medium and large businesses can benefit from single-rate payment options. These are businesses that have more than 10 employees. Businesses with fewer employees may not feel that PEO services are worthwhile. Single-rate services allow you to select only one service and its monitoring requirements. The average cost to set up an account with a PEO is $1,000-$5,000. There will also be other fees applied to your account. Some of these will factor in each individual employee.

In most cases, professional employer organizations are positive investments. They save time and money for employers. Most businesses enter into long-term relationships with their providers. This is only possible when you find a qualified provider that meets your needs.

by: Haig Armen

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