For outsourced human resources, Axcet HR Solutions is your professional employer organization (PEO) partner.
PEOs are the best-kept secret of many high-performing small businesses – likely including your competitors. Your company, too, can build your HR bench strength, adding affordable expertise by partnering with a powerhouse PEO.
Fewer HR Headaches
Peace of Mind
Improved Recruitment Efforts
Better Employee Benefit Rates
Workers’ Comp. Insurance Options
Reduced Paperwork Burden
Decreased Administrative Expenses
PEOs: Fueling Business Growth
Short for professional employer organization, a PEO is comprised of a team of HR experts to whom your small or mid-sized business can outsource burdensome day-to-day human resources tasks. PEOs were founded more than 30 years ago to provide first-class HR support and benefits for small to mid-sized businesses, which typically need HR services but don’t have the resources to maintain a broadly experienced, in-house HR department.
The PEO provides comprehensive HR solutions through a co-employment relationship.
What is a PEO and How Can it Help Your Business
A PEO relieves burdensome HR work from small business owners and helps lower employee turnover and helps a business grow faster.
Our Certified PEO Solution
As a partner to small and mid-sized businesses in the Kansas City area for more than 30 years, we’ve helped businesses like yours thrive and grow.
"We've used Axcet for many years and have always been pleased with their services. We use them for our payroll, benefits and HR support. The staff is "top-notch!" Axcet offers great training and support in areas of HR, compliance, and payroll."
Gloria R. | Lenexa, Kansas
Expertise You Can Use Now
Signs You May Need a PEO
Navigating the realm of human resources can be difficult, particularly for small businesses. Lacking many of the resources larger companies have and with plenty of operational pressures to attend to, small business owners sometimes push HR to a back burner.
You’ve Got Questions about PEOs. We’ve Got Answers.
A few frequently asked questions – and answers – for those interested in learning more about PEOs (professional employer organizations).
PEO stands for Professional Employer Organization.
A PEO provides employment management tasks including employee benefits, payroll administration, workers’ compensation, human resources, and risk and safety management, and human resources compliance guidance.
A PEO, or a professional employer organization, allows companies to outsource key human resource functions like payroll, benefits, training, and guidance to assist small and mid-sized companies with maintaining compliance with federal and state labor and employment laws. Working with a PEO can help business owners and their management teams focus on the business.
Professional employer organizations (PEOs) provide human resources services for their small business clients—paying wages and taxes and often assisting with compliance with myriad state and federal rules and regulations.
In addition, many PEOs also provide workers with access to 401(k) plans, health, dental, and life insurance, dependent care, and other benefits not typically provided by small businesses. In doing so, they enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll, and workers' compensation. PEO clients can thus focus on their core competencies to maintain and grow their bottom lines.
PEOs typically serve as professional employers of their client's employees. The client company reports its wages under the PEO's federal employer identification number (FEIN), and employee liability shifts to the PEO. Employers gain economies of scale by having more benefits options, sometimes at lower rates.
A small- to mid-sized business would turn to a PEO in these cases:
- HR Compliance – They are concerned about legal or regulatory jeopardy as it relates to HR compliance to EEOC, ADA, DOL, or OSHA agencies and they do not have the expertise to manage the situation.
- Time Management – Small business owners often become so overwhelmed with managing routine HR and payroll issues that time to focus on growing the business gets squeezed out.
- Quality Health Benefits – When a business is small, it typically can’t afford the health benefits available to larger organizations with a bigger, more diverse, employee pool.
- Scalability – As a small business grows, its HR needs get more complex. It’s time for consistent and repeatable HR policies and procedures.
Business owners want to focus their time and energy on the "business of their business" and not on the "business of employment." As businesses grow, most owners do not have the necessary human resources training, payroll and accounting skills, knowledge of regulatory compliance, or backgrounds in risk management, insurance and employee benefit programs to meet the demands of being an employer. PEOs give small-group markets access to many benefits and employment amenities they would not have otherwise.
A PEO's economy of scale enables each client company to lower employment costs and increase the business's bottom line. The client can maintain a simple in-house HR infrastructure or none at all by relying on the PEO. The client also can reduce hiring overhead. The professionals at the PEO can provide critical assistance with employer compliance, which helps protect the client against liability. The PEO client can access significant technology and service infrastructure provided by the PEO. In addition, the PEO provides time savings by handling routine and redundant tasks for its clients. This enables the business owner to focus on the company's core competency and grow its bottom line.
There are lots of reasons a small- to mid-sized business would use a PEO. Here are 10 benefits:
- Businesses that use a PEO are 50% more likely to succeed.
- PEO Clients grow 7 to 9 percent faster than businesses not using a PEO.
- Those who use a PEO have 10 to 14 percent lower employee turnover.
- Employees have access to more and better benefits including 401(k), health, dental, and life insurance.
- You – and your employees - will receive HR and payroll support whenever you need it.
- An online portal for employees to access payroll and benefits information.
- Ensure compliance with all state and federal regulations related to employment law and payroll administration.
- Expert support to assist with any HR regulatory changes that impact your employees and your business.
- Get out of doing human resources administration and paperwork.
- Peace of mind – Companies that partner with a CPEO can rest easy, knowing the CPEO meets rigorous IRS requirements that illustrate organizational integrity, expertise, and fiscal health
PEOs (professional employer organizations) are designed specifically to help small- to mid-sized businesses. Typically, these businesses don’t have the resources in house to effectively manage benefits, payroll, Human Resources, HR compliance and workers’ compensation. A PEO fills that need and assumes the responsibility for routine, HR administration, such as payroll, employee handbook, safety assessments, and health benefits open enrollment. The business maintains complete control over the employees and day-to-day business operations.
PEOs are generally the best fit for small- to mid-sized businesses that have fewer than 250 employees.
Axcet works with clients who have a presence in 46 states within the United States. So multi-state and long-distance support are never a problem.
That said, we find that we work best with businesses that are headquartered within 250 miles of Kansas City because we're better positioned to provide that hands-on access that our clients come to really appreciate.
When a company partners with a PEO, a “shared employment” relationship is created Shared Employment” means that both the company and the PEO have an employment relationship with the employee. In this relationship, the PEO typically assumes responsibility and liability for the employee administration functions of payroll, benefits, human resources, and risk management. The company still maintains control over all other employment aspects, including hiring setting wages, supervision, etc.
While both are considered human resources outsourcers, they operate in different roles.
- Staffing agencies recruit, screen, and place workers with companies.
- A PEO takes on the responsibility for payroll, employment taxes, benefits, human resources, unemployment claims, and assisting with workers’ compensation and safety matters.
Professional Employer Organizations (PEOs): What You Need to Know
Small businesses launch because entrepreneurs see opportunities to bring something new to the marketplace – new ideas, new services, or a new and better way of doing what competitors aren’t doing very well.
What small business owners often discover, however, is that their passion and attention get diverted quickly by demands they aren’t so enthusiastic about, like managing payroll, hiring and training new employees, and complying with HR-related regulations. They have to spend so much costly energy working on the business, they can't do what they love.
Those tasks are necessary to business health, of course. But when they start bogging small businesses down and commandeering time that could be better spent on strategy and growth, PEOs offer an exceptional solution.
What Is a Professional Employer Organization?
A PEO is comprised of a team of experts to whom your small or mid-sized business can outsource burdensome day-to-day human resources tasks. The PEO becomes a co-employer with you under a contractual arrangement that puts the most time-consuming chores and complex liabilities, like payroll processing, payroll tax filings, workers’ compensation, unemployment claims, and regulatory compliance, onto the PEO’s plate.
Besides those administrative responsibilities, you may choose to take advantage of other PEO services, such as management training and development, recruitment assistance, employee relations, and organizational structure review and design. These services can be highly beneficial for small companies that have limited HR expertise and small (or no) HR staff.
PEOs have no ownership in their clients’ companies. Your management team continues to guide and supervise employees’ daily job responsibilities, make hiring and firing decisions and handle all business and operations decisions. In other words, the right PEO for your company will never disrupt your workplace or get in your way but instead will support and provide cost-effective resources that help your company grow.
What’s the Difference Between a PEO and a CPEO?
It’s important for a small or mid-sized employer that is thinking about establishing a PEO relationship to recognize the difference between a PEO and a CPEO, or certified professional employer organization. Like a PEO, a CPEO assumes the co-employer/administrative employer of record role for payroll, government compliance, risk management, and, in many cases, benefits administration.
But certified PEOs, which have voluntarily completed a rigorous Internal Revenue Service review process, offer a distinct peace-of-mind advantage: The IRS certification means the CPEO is solely liable for paying employment taxes on wages paid to its clients’ employees. An uncertified PEO that fails to pay those taxes offers its clients no safety net. If the taxes are unpaid, the IRS can seek payment from the client, even if the client already has paid those same payroll taxes to its PEO.
Axcet HR Solutions, established in 1988, was the first company to offer PEO services in Kansas City and among the first group of PEOs nationwide to earn CPEO designation in 2017, the first year the program was offered. Axcet maintains the certification through annual IRS audits of our financial and organizational practices.
What Companies Should Hire a PEO?
Professional employer organizations work exclusively with small and medium-sized businesses. The whole idea behind PEOs is to give smaller companies access to the level of health care benefits and HR expertise that large companies have.
Working with a PEO can benefit any smaller company. It’s especially time to consider outsourcing HR to a PEO when:
- You don’t have enough time to address pressing HR needs and give attention to strategic initiatives.
- Your company’s growth now requires more sophisticated HR expertise than anyone in the organization has.
- You can’t afford to hire an HR professional or beef up a small HR department – and you recognize that shifting HR duties to someone who’s already on the team but who doesn’t have real knowledge or experience won’t solve the problem – and could even put the company at risk.
- Rising costs are making it tough to afford the benefits your employees value.
- Your company is struggling to attract and retain high-performing employees.
- You’re having trouble keeping up with employment regulations.
- You need guidance to create an appealing culture that makes employees want to join and stay on your team.
What Does a PEO Offer?
A PEO can handle any and all HR tasks, including:
- Payroll processing and payroll tax administration
- Payroll record keeping, compliance, and management reports
- Help with recruiting and onboarding
- Drug testing
- Health care benefits procurement and administration
- Employee performance
- Employee engagement strategies
- Compliance and leadership training
- Employee complaints
- Harassment investigations
- Workers’ compensation
- Workplace safety
- Termination assistance
- Unemployment claims
- Risk management
- And much more
PEOs usually are paid based on a percentage of a client’s payroll or a flat monthly per-employee fee.
Why Should Your Business Hire a PEO?
Outsourcing PEO services in Kansas City essentially brings professional HR talent under your smaller company’s roof. The PEO relationship offers four primary benefits:
1 - Expertise
Your company gains access to seasoned HR subject matter experts who provide extensive knowledge and expertise your small business could not afford to build in-house. If your company already has an HR department, the PEO will work alongside these individuals, taking on time-consuming administrative tasks and providing counsel on significant HR projects.
2 - Found Time
The PEO relationship gives you back time to invest in growing your business. Because your PEO partner will take on HR-related administrative work, the thought and action you have to dedicate to HR management become minimal. You then are freed up to focus on strategic objectives.
3 - Reduced Risk
The PEO assumes employer liability. Certain tasks the PEO takes on come with risks. For example, about 40% of small to mid-sized businesses face penalties related to incorrect payroll filing each year, according to the IRS. As an employer who works with a PEO, you no longer have to be concerned about payroll mistakes, missed deadlines, or compliance risks under Title VII, ADAA, FMLA, or EEOC.
4 - Better Benefits
In surveys, employees consistently state they consider the quality and personal cost of benefits of equal importance to their salaries, if not more so.
So, providing employee benefits is a necessary aspect of running a business. But it’s also expensive. Benefits make up about 30% of the total cost of keeping a worker on board. In August 2019, the United States Small Business Administration reported that the typical cost of all employee benefits is 1.25 to 1.4% of the employee’s salary. The SBA gave an example of an employee who earned a base salary of $35,000 per year. After adding benefits expenses, the employer cost totaled more in the range of $43,750 to $49,000 per year.
Not surprisingly, small business employee benefits costs often are higher than what large businesses pay. Fewer employees mean a smaller risk pool, for which insurance companies charge higher employer premiums. These higher costs limit smaller companies’ access to volume discounts on value-packed benefits packages.
Partnering with a PEO changes that paradigm. Your employees gain access to Fortune 500-style benefits packages at an affordable rate. For some business owners, this alone is what originally compelled them to seek out a PEO.
The way an insurance company sees it, a larger pool of employees spreads out the risk of high-cost claims. Through co-employment, your workers can be included in the PEO’s employee group, which allows the PEO to take a much larger group to the health care marketplace.
A PEO does the research on behalf of clients and then presents them with several options. Your company thus gets access to broader and more-affordable health and disability insurance and other employee benefits than you might be able to obtain on your own. Companies with as few as 10 employees may participate in most PEOs’ large-group health insurance plans, which can be a powerful recruitment tool.
A PEO also offers benefit administration services, including:
- Annual review of employee benefit options
- Assistance with employee enrollment
- Communicating benefit plan information to employees
- Collecting and delivering premiums to providers
- Handling employee family status or demographic change requests
Your PEO in Kansas City
Establishing a PEO relationship with Axcet HR will help your small or mid-sized Kansas City-area company to better manage regulatory compliance and rising health care costs and alleviate the burdens and paperwork associated with HR administration. Axcet becomes a true HR partner to help your company meet its business objectives.