How Does A PEO Work?
A Professional Employer Organization (PEO), can reduce insurance and administrative costs, allowing you to win more bids and have more time to focus on growing your construction company. Just a few of the benefits a PEO service provides includes:
- Big discounts (up to 40%) on pay-as-you-go workers' compensation insurance - even with bad claims history. Plus, no audits, with little to zero down!
- Outsourced payroll, relief from employment liabilities and HR compliance demands, allowing for more time to work on growth
- Group healthcare and other employee benefit options, including vision, dental, even 401(k) savings plans
What Do PEO Services Cost?
On average, PEOs charge an administrative fee of 2-4% of your annual payroll. For example, if your annual payroll was $500k and the PEO provider management fee was 2% - that's $10k. The services included in costs are complete payroll administration throughout the year, including all tax reporting and W-2s, safety and HR services, free direct deposit, wage garnishments and management of employee benefits to name a few.
With the Small Business Administration and US Chamber of Commerce studies showing in-house costs of managing these employment issues ranging between 9-13% of payroll - working with a construction focused PEO isn't just a good deal, it's a great deal.
PEO Workers' Compensation Savings
Construction PEO programs can provide an immediate and dramatic cost savings under the PEO's master workers' compensation insurance policy. These companies have hundreds of clients taking in millions of dollars in insurance premiums, so good risk management practices lead to favorable work comp experience ratings.
This allows the PEO company to immediately share in those discounts with their clients. While average savings range between 17-20%, some clients experience greater savings based on the work performed and state locations. Even construction companies with higher xmods based on claims can see immediate savings, unlike traditional policies that force you to wait out an unfortunate claim or two. And with the PEO managing payroll, a direct audit is performed each pay period, so you'll never experience an audit again.
Why Choose ELQ?
Since 2001, we've helped construction business owners find the right PEO solutions for their needs. Need to lower your workers' compensation insurance rates? We can help. Want to outsource payroll headaches? We can do that, too. Call us today and see how the services we provide can save you time and money.