Looking for more staff to run your business operations? Why not opt for a co-employment relationship? Considering the rapidly growing work pressure, companies are opting for alternative employment arrangements to meet their requirements for a sufficient workforce.
The co-employment relationship is such an arrangement that helps business organizations meet their goals and deadlines on time. In this practice, two or more entities share an individual’s or group of workers’ employment. Keep reading for a detailed overview of the same!
What is Co-employment?
In the co-employment model, a business shares its employment responsibilities with a PEO (Professional Employer Organization). Here, the business owner makes employment-related decisions while retaining managerial control.
On the other hand, the PEO functions as the employer of employee records. They handle HR, payroll, and other parts of employee management. Moreover, they also file the payroll taxes and payroll under their EIN (employer identification number).
What are the Benefits of Co-Employment?
Co-employment provides a bunch of benefits to business organizations, especially small business firms. Here are some of the notable benefits of a co-employment relationship:
- Get HR Support
When you opt for co-employment, you can put the PEO in charge of the HR tasks. Though the in-house HR team could have completed the responsibilities much faster than the PEO, they might lack the expertise. Hiring a PEO indicates you have access to experienced and knowledgeable human resource support. This is highly beneficial for small businesses that don’t have enough resources to build their HR team.
- Enjoy Flexibility
Co-employment offers client companies the flexibility to scale their workforce up or down. It helps meet the fluctuating demands quickly without incurring the costs and administrative burden of traditional hiring and firing processes.
- Receive Compliance Support
Providing the right compliance support to your business is not a cakewalk. You need skilled and expert professionals with adequate knowledge of business laws and regulations. Hiring PEOs can be a great relief as they have experienced specialists who remain updated with the latest rules and regulations. So, if you are not aware of the changing laws, you can still steer clear of accidental violations with the professional PEO team.
- Get Health Insurance
When providing health insurance to employees, PEOs can secure better rates and provide standard benefits and offerings. Small businesses often fail to find better insurance rates and benefits because they negotiate for a limited number of employees. On the other hand, PEOs negotiate insurance rates on behalf of multiple companies and their employees. So they have fair chances to secure reasonable rates and better benefits.
- Ensure Payroll Processing
Payroll-related work needs expert attention and consumes time. Moreover, any minimal mistake in payroll processing can lead to legal hazards and other inconveniences. Thus, most companies prefer outsourcing payroll. When you opt for a co-employment model, PEOs take care of the payroll processing, ensuring timely and accurate processing.
- Share Liability
By sharing certain employment responsibilities and liabilities, the client company and the PEO assume a degree of risk mitigation.
Final Word
Co-employment presents an evolving model for organizations to optimize workforce management and operational efficiency. It offers flexibility, access to specialized HR expertise, shared liability, etc. However, you need to maintain effective communication to reap the maximum benefits of co-employment.
If you are finding PEO services for your company, contact us. We can help you get professional assistance for employee management. Our blog section also includes several informative pieces about co-employment relationships that can give you insight into better management.
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