If you feel that you need support in managing HR and payroll processes, you’ll probably turn to a Professional Employer Organization or PEO. Now, this decision of yours requires thorough consideration because these organizations have multiple moving parts. You have to understand whether you’ll benefit from the services offered by these organizations at all or not. You’ll also need to think about the matter based on the size of your company and its future objectives. That’s why you should go through the PEO pros and cons described below.
Liability sharing in co-employment
When you work with PEO service providers India, you’ll lease your employees and co-employ workers. It means your company’s workers will get incorporated under the tax ID of the PEO. As you can probably guess, the PEO shares all the risks and liability-related matters with you. It will also help you manage several tasks, including reporting workers’ compensation and state unemployment.
Relinquishing control in co-employment
As this topic is about PEO pros and cons, here’s a disadvantage worth mentioning regarding co-employment. It feels nice knowing that your PEO partner helps you complete your HR and payroll tasks. It also bears the risks associated with those tasks. Then again, your employees get co-employed by the organization, which, in turn, relinquishes a bit of the control you have over your company. Therefore, you’ll need to contact your PEO as soon as a problem pokes its head out. It’s precisely where co-employment with PEOs loses its efficiency. Furthermore, you need to think about how your relationship with your PEO affects your company’s culture.
Employee benefit rate reduction
The best PEO service providers India usually work with several small businesses simultaneously. They have a significantly large employee pool to draw from, as well as a massive array of options concerning employee benefits. As an employer, your company has to provide health insurance to your employees. If you search the market for insurance-related products, you’ll realize how costly they can be for your business. Your PEO will be able to gather health insurance options that won’t cost you an arm and a leg because they’ll negotiate lower-group insurance expenses and unemployment insurance rates.
Low-quality employee benefits
The catch to the aforementioned advantage is that the employee benefits won’t be of the highest quality. For example, you won’t be able to customize healthcare plans suitable for your employees. You’ll have to remain satisfied with what you get. Apart from that, your PEO may choose to change insurance service providers whenever it wants to. It means insurance prices will fluctuate whenever your PEO shifts to a new insurance provider drawing the flak of your employees.
