Partnering with a PEO can result in significant cost savings for businesses.
Imagine the significant cost savings a business could enjoy by partnering with a Professional Employer Organization (PEO) instead of managing all its HR functions in-house.
Partnering with a PEO can result in significant cost savings for businesses. Here’s an estimate of potential cost savings:
Estimate of Cost Savings with a PEO
| Category | Business Handling HR Independently | Partnering with a PEO |
| HR Management | In-house HR team salaries | Reduced in-house HR team costs |
| Payroll Processing | Payroll software, staff salaries | Managed by PEO at a reduced cost |
| Employee Benefits | Higher costs for health insurance and retirement plans | Competitive rates due to PEO’s group purchasing power |
| Compliance and Risk Management | Legal fees, penalties for non-compliance | Lower risk of legal issues with PEO’s expertise |
| Training and Development | Training program costs | Provided by PEO, reducing in-house costs |
Potential Percentage Savings:
- Employee Benefits: Businesses can save around 15-25% on employee benefits due to the PEO’s buying power.
- Payroll Processing: By using a PEO, companies can save approximately 10-20% on payroll-related expenses.
- Legal Compliance: Potential risk reduction in fines/penalties, saving businesses up to 20-30% on compliance costs.
- HR Management: Decrease the need for extensive in-house HR teams, leading to a potential 12-13% savings on HR operational costs.
These estimates can vary depending on the business’s specific needs and the PEO’s services, but overall, partnering with a PEO can provide substantial cost savings while ensuring efficient HR management and compliance.
Source:
1 blog.zamphr.com
2 onwardadvisorsinc.com