Engaging a PEO: Reducing Employer Related Costs

The Indirect Costs of having Employees

How much does your company spend on employment administration?

According to a study commissioned by the US Small Business Administration in 1995, the average cost per employee per year for a firm with fewer than 500 employees is $5,000. This cost includes the impact of all Federal regulatory paperwork and tax requirements placed on a company. While these costs may be "hidden" in terms of the time your staff spends managing paperwork, make no mistake, they are real. Let's look at the major cost components:

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Labor Accounting and Reporting Costs

• Building and running labor costs reports including departmental or job costing labor reports
• Journal Entries for labor costs, tax withholding, etc.
• Federal, State and Local Tax Filings
• Regulatory Agency Reporting and Filings

Human Resources Administration Costs

• I-9 Verification
• Background Checks (optional)
• Pre-Employment Testing (optional)
• Recruiting, Advertising, Resume Screening, Interviewing (optional)
• Employee Handbooks
• Performance Appraisals
• Rewards and Recognition Programs (optional)
• Position Descriptions
• Drug-Testing (optional)
• Training (Employee and Managerial)

Payroll Administration Costs

• Employee time collection and reporting
• Payroll errors handling
• Third party inquiries administration for employment confirmations
• Employee Garnishments, Child Support and Tax Levies
• W-4 administration
• W-2 Printing and Reporting

Benefits Administration Costs

• Plan Acquisition Costs
• Plan Enrollment Reporting and Administration
• Plan Premium Remittance to Insurance Carriers
• Employee Plan Enrollment and Termination Reconciliation with insurance carriers
• Annual Plan Enrollment, ERISA and HIPPA Compliance
• Claims Management

Each of these cost categories above applies to each type of insurance your company wants to offer including:

• Medical Plans
• Dental Plans
• Long Term Disability
• Short Term Disability
• Accidental Death & Dismemberment
• Life Insurance
• Vision Plan
• 401(k)
• IRA
• Employee Assistance Programs
• Flexible Spending Accounts

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StaffMarket works with 451 PEOs with over $25 Billion in annual sales. Join over 110,000 businesses and 1,657,000 employees who are getting quality services and benefits with a StaffMarket PEO.

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Spotlight PEO for
Monday, February 06, 2012:
OPTIMUM OUTSOURCING, LLC.

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1/17/2012
Administrative Concepts Sells PEO Operation
Administrative Concepts (ACC) a long time PEO in Florida has sold its operation to Progressive Employer Management Company (PEMCO) a Professional Employer Organization located in Sarasota Florida.

1/6/2012
Employee Leasing Solutions Sold
One of the founders of the employee leasing industry, William Mullis has sold his company, Employee Leasing Solutions to a new employee leasing company named Workforce Business Services.

12/8/2011
Eight US States Increase Minimum Wage Rates for 2012
Eight US States have new minimum wage rates for 2012. Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington have new minimum wage rates effective January 1, 2012.

12/5/2011
Chiropractors Explore Alternate Staffing Arrangements
Article discusses the challenges faced by medical organizations when staffing to meet their business needs. Contract labor, staffing companies and Professional Employer Organizations offer options that come with differing employer responsibilities.

11/21/2011
Senate Bill seeks to clarify tax treatment for PEOs
US Senator Chuck Grassley introduces senate bill SB 1908 that seeks to clarify tax treatment for Professional Employer Organizations (PEOs).

11/16/2011
NAPEO Names New President and CEO - Pat Cleary
The National Association of Professional Employer Organizations (NAPEO) names new President and CEO.

11/9/2011
Pennsylvania Senate moves on PEO legislation
The Pennsylvania senate has scheduled SB 1069 that regulates Professional Employer Organization activities in the state.