One of the biggest challenges a practice owner faces is the administrative side of small business. ODs are well trained in clinical care, but many of us feel overwhelmed with the business management of a practice, especially evaluating finances, setting up business policies, and handling human resources (HR).
While ODs learn some of these skills in optometry school, such tasks demand significant time and attention to master. In addition, when students are exposed to them, they usually don’t yet have the real-world experience to put them into context.
A professional employer organization (PEO) provides comprehensive human resource solutions for small to mid-size businesses by allowing owners to outsource tasks such as:1
• HR management
• Benefits administration
• Payroll processing
• COBRA and worker’s compensation
• Tax administration/compliance
• State unemployment insurance
• Recruiting support
• Risk/safety management
• Staff training and development
• Regulatory compliance
By handling required paperwork and providing regulatory compliance assistance, PEOs can potentially help practices focus more on their primary mission while simultaneously improving productivity and profitability.
According to the National Association of PEOs (NAPEO), staff can gain access to enhanced employee benefits traditionally reserved only for large corporations, such as:2
• 401(k) plans
• Insurance (health, dental, life)
• Worker’s compensation
• Dependent care
• Other perks not typically available to employees of small companies
Roughly 175,000 U.S. businesses have determined the benefits outweigh these risks and costs, and have contracted with one of the 907 PEOs now operating across the country.3 This means that PEOs in the U.S. cover a collective annual payroll of $176 billion, representing 3.7 million workers.4
As a result of this ability to leverage the collective buying power of large numbers of employees aggregated from numerous employers, PEOs have become increasingly popular in the past three decades.
1. D’Angelo M. A Guide to PEOS and Employee Leasing. Available at: https://www.businessnewsdaily.com/2391-outsourcing-human-resources.html. Accessed 10/3/18.
2. National Association of Professional Employer Organizations. FAQS. Available at: https://www.napeo.org/what-is-a-peo/selecting-a-peo/faqs. Accessed 10/3/18.
3. Bassi L, McMurrer McBassi D. An Economic Analysis: The PEO Industry Footprint in 2018. Available at https://www.napeo.org/docs/default-source/white-papers/2018-white-paper-.... Accessed 10/3/18.
4. National Association of Professional Employer Organizations. Industry Statistics. Available at: http://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-stati.... Accessed: 10/3/18.
5. National Association of Professional Employer Organizations. About the PEO Industry Overview. Available at: https://www.napeo.org/what-is-a-peo/about-the-peo-industry/overview. Accessed 10/3/18.
6. National Association of Professional Employer Organizations. NAPEO White Papers. Available at https://www.napeo.org/what-is-a-peo/about-the-peo-industry/napeo-white-p.... Accessed: 10/3/18.
7. Intuit QuickBooks. Should Your Small Business Work with a Professional Organization? Available at: https://quickbooks.intuit.com/r/hr-laws-and-regulation/should-your-small.... Accessed 10/3/18.
8. Handrick L. Professional Employer Organization (PEO): Definition and Features. Available at: https://fitsmallbusiness.com/professional-employer-organization-peo/. Accessed 10/3/18.
9. Grassley C. S. 479 Small Business Efficiency Act. Available at: https://www.congress.gov/bill/113th-congress/senate-bill/479. Accessed 10/3/18.
10. National Association of Professional Employer Organizations. Guidelines For Choosing a PEO. Available at: https://www.napeo.org/what-is-a-peo/selecting-a-peo/guidelines-for-choos.... Accessed 10/3/18.
11.Bassi L, McMurrer D. PEOS: Good for Businesses and Their Employees. Available at: https://www.napeo.org/docs/default-source/white-papers/2017-napeo-white-.... Accessed: 10/3/18.