Benefits of PEO Child Care Services
For decades, PEO providers have long been a powerful partner in the childcare industry. They continue to gain popularity for a simple reason. They allow employers to concentrate on running their business, while leaving the risk and liabilities on the PEO. Removing the headaches of payroll, workers’ comp, benefits administration, and a list of governmental HR demands allows a business to focus on growth.
Common PEO Benefits Include:
- Workers' compensation- Businesses utilizing a PEOs “master work comp policy” save an average of 17%-20% on their workers’ comp insurance and many times much more. Even companies who’ve had injuries and claims issues can experience dramatic savings. Plus, there are no down payments, state policy fees, or work comp audits as the PEO performs a direct audit with each pay period.
- Employee Benefits- A PEO can help you attract and keep the employees you need for your childcare business to be successful. Whether you’re looking for group healthcare, dental and vision insurance, life and accident policies, or a 401(k) retirement plan – the right PEO partner can make this process simple and easy for your business.
- Payroll Administration- Payroll is time consuming and can be complex for many businesses. PEOs make payroll simple by allowing employers to make one payment per payroll cycle, that is accurate, on-time and covers all their liabilities from payment of taxes, employee garnishments and more. Employers provide a list of their employees, hours worked, rate of pay – and let the PEO handle the rest.
- HR- Did you know that 45% of the average small business owner’s work hours are spent on HR-related tasks? Keeping up with local, state, and Federal labor and employment laws, risk and compliance, employee benefits, and unemployment claims require constant attention. A PEO reduces your liability exposure to these constantly changing risks.
How Does A PEO Relationship Work?
PEOs allow you to outsource all the time consuming, administrative work that comes with employment and drives zero income into your childcare business. Payroll, garnishments, tax reporting, human resource issues, unemployment claims and more create a heavy time burden on small businesses taking away from their core competencies. Simply put, a PEO becomes your back office partner giving you more time focus on the things that really matter, like children, employees, and growth.
Known as a co-employment relationship, the PEO or employee leasing company becomes the administrative branch of your childcare business. The management of employment is a critical task, but one that also produces no direct income for the business. That’s why partnering with the right PEO can help your organization.
How Much Do PEOs Cost?
On average, a PEO specializing in the childcare industry typically charges 2% - 4% of your annual payroll. For example, if your annual payroll was $200k and the PEO service charge was 3% - that's $6k annually for all the services mentioned. These costs are well below the 9% -13% average as stated by the Small Business Administration for managing these tasks in house. While eliminating the purchase of check stock, envelopes, updating payroll tax software and so much more - giving you back more TIME is the biggest savings when partnering with a PEO provider.
Outside of this, some programs offer more robust benefits such as, background checks, life insurance, employee counseling services and much more. Understanding your business history and needs where a PEO will create impact is just one of the many ways we can help.
How Can ELQ Help?
As the nation's leading PEO brokerage since 2001, ELQ is the easiest way to find the right company for you. With over 900 PEO, ASO and HR outsourcing companies to consider, there may be only a handful that work in the child daycare industry.
So, whether it's savings on work comp insurance rates because of a few years of bad claims history, outsourcing payroll, or accessing employee benefits to keep key personnel - we can help. A short call understanding your needs and how these services could benefit your business, could save you thousands of dollars in insurance and time. Call of fill out our online form and get started today!