A new startup usually needs support: financial, organizational, consulting, educational, and so on. For help, you can apply not only to state funds but also to professional employer organizations. Nevertheless, founders must realize that to receive assistance, a startup must meet the approved conditions: the project will probably have to pass a selection process that involves numerous checks. In addition, the very process of obtaining assistance can be very lengthy for bureaucratic reasons, although not always.
Meet Professional Employer Organization
Startup owners struggle to solve employee problems and try to increase their income. If the workload on human resources becomes unbearable and the vision of a startup deteriorates, it is important to consider PEO.
What is a professional employer organization? PEO companies will help your startup with administrative and HR tasks. When your company becomes a PEO customer, you enter into a collaboration agreement that gives PEO access to segregation of duties between employees. A contract agreement gives a startup several benefits and additional perks for its employees. PEO will also take care of payroll administration, tax filing, and HR support so you can focus on growing your startup.
How a PEO Company Can Help Your Startup
If you feel that your startup’s administrative tasks are holding back the growth of your business, you should consider helping out with PEO. Outsourcing your human resources to a PEO company can give your business many benefits, such as:
- Access your employees to competitive advantages, including medical, dental, and vision insurance. A comprehensive benefits package can help your startup attract and retain highly qualified candidates for open positions.
- Exemption from administrative expenses. A PEO company can provide your startup with payroll and tax breaks. By outsourcing HR to a PEO company, you can spend more time growing your business.
- Employee Onboarding. With PEO, you can offer comprehensive employee onboarding that ensures new hires are properly documented and have integrated HR technologies.
- Human Resource Guide. PEO companies will provide valuable advice on HR-related issues, with a focus on federal, state, and local employee-related regulations. HR professionals can help with guidance in situations employees may have and can determine the best course of action to help all parties involved.
Make a Decision and Get Involved
Any decision begins with the formation of an internal need. First, highlight a function that the PEO can be trusted with. You should not focus on others: answer the question: “Why does my startup need this?” If there is a need, and a clear answer, you can go further and conduct brief analytics. To do this, proceed from rational considerations. For example, when your startup decided to go online. You need to carefully calculate everything and highlight the pros and cons. What will be the costs? Are you willing to pay for additional services? Please, write down the answers to all questions, and the picture will become clearer.
Find a Standing PEO
When the analytics is done, it remains to find a good PEO. Consider monetary and reputational risks. For example, services that cost half as much as legal providers offer are risks, and besides, they may be illegal. Remember, responsible PEOs pay taxes. In case of non-compliance with the norms, then fines will come to you. There is a liability risk here. Therefore, when choosing a PEO, it is vital to figure out how he plans to work: request detailed estimates of all services, sample contracts, and check the company’s reputation – whether there have been any legal claims against them.
If you are thinking of expanding to a specific country then you can also choose a country-specific PEO, for instance, if you choose a PEO in Cannada then they will help you with hiring and expansion there.
When can you opt-out of PEO services?
Again, it is critical to understand why exactly you need PEO services. In some cases, it is better to refuse it if you want to save money. Of course, everyone wants to save where possible, but if cost optimization is the only motivation for using PEO services, this is a bad idea. Legitimate companies deduct for employees almost the same contributions as a startup. If you are offered to save on social contributions or offer an hourly rate that is significantly lower than the market rate, be extremely careful.
When choosing the right PEO, study the conditions and requirements: what projects are supported, what is expected in return, and how much funds can be expected. This will help to initially assess the feasibility of going through the procedure for a startup.