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Frequently Asked Questions
What is a PEO?
A Professional Employer Organization, or PEO, is a one-stop service provider that allows business owners to concentrate on running their businesses without getting bogged down in administrative headaches. It also allows them to provide employees with benefits that would normally only be available at much larger companies.
Employees on SOI's payroll are able to participate in our health, retirement, and supplemental benefits and are covered by our workers' compensation policy, so you don't have to worry about making these complex arrangements. We take care of the payroll, including everything from printing the checks to reporting and paying the employment taxes. We provide human resources and compliance expertise, while you remain in control of your product and day-to-day business operations.
What is a "Co-Employment" relationship?
In a "Co-Employment" relationship, the PEO becomes the legal, "employer-of-record" for employment tax and benefits purposes. This relationship allows the PEO to assume many of the employment-related responsibilities and risks, while you enjoy the benefit of retaining essential control over the supervision and direction of the work, as well as production and delivery of your company's products or services.
As a business owner, your most important function is focusing on core activities and managing the day-to-day activities of your business. SOI concentrates on certain non-revenue-producing tasks present in every business, such as payroll processing, benefits and human resource administration.
The employees provide the skills and labor associated with the production of goods or services produced by your business.
What is Employee Benefits Pooling?
Through a concept we call "Employee Benefits Pooling", SOI pools together hundreds of companies representing tens of thousands of employees. The economies of scale generated by this unique concept allow us to negotiate the best rates and benefit programs possible. Your organization is then able to leverage SOI's expertise and collective buying power.
Why would a business want to use a PEO?
Most business owners start businesses to earn a profit. Day-to-day management of "non-core" aspects of their businesses often create distractions unrelated to their core business and how they earn profits. As their business continues to grow, they may not have the requisite training or internal resources in the areas of payroll, human resources, risk management, regulatory compliance, and employee benefits programs to address the needs of employee personnel. PEOs bring large-group resources and access to benefit plans and programs the employer would not enjoy otherwise.
Does the business owner lose control of their business in a PEO relationship?
No. In fact, they may gain better control over their business. The PEO client retains ownership of the company and complete control over its daily operations. As related in the terms of the service agreement between the Client and PEO as "co-employers", the PEO and client will contractually share and allocate employer responsibilities and employer-related liabilities. Generally, the PEO focuses on employment-related issues and the client will be responsible for the direct business operations.
How do PEOs assist their clients to contain or reduce employer-related costs and improve profitability?
Cost containment and reduction is accomplished in a variety of ways. PEOs continuously generate economies of scale as new clients and work-site employees are added to their pool. This yields the direct benefits of both reducing employment-related expenses borne by the employer and contributing to the business' profitability. In a PEO relationship, the client may maintain only the necessary level of in-house HR infrastructure dependant upon its reliance on the PEO. In addition, the PEO provides significant time savings by managing many routine and redundant employment-related tasks for its clients, enabling the business owner to focus on the company's core competencies and concentrate efforts on those activities that generate revenues and profits.
How do employees benefit from a PEO arrangement?
Employees seek financial security, quality health insurance, a safe working environment and opportunities for retirement savings. When a company works with a PEO, job security is improved as the PEO implements efficiencies to lower employment costs. Studies prove job satisfaction and productivity increase when employees are provided with professional human resource services, training, employee manuals, safety services, and improved communications. And in many cases, a co-employment relationship provides employees with an expanded employee benefits package, including a 401(k), life insurance, disability insurance, discount plans, a flexible spending plan, and more.
Can a PEO help me gain focus and competitive advantage in my industry?
It's common knowledge that the key to gaining competitive advantage is through a well-trained and highly skilled workforce. Our belief is that by outsourcing various "non-core" functions of your business to a company specializing in those functions, not only are you able to provide more attention and direct focus to your "core" business, but you also receive the added value of highly skilled specialists to attend to those outsourced functions.
Will my employees be eligible for a comprehensive benefits program?
Frequently, a PEO arrangement is the only opportunity for workers of many small businesses to receive Fortune 500®-quality employee benefits such as health insurance, dental and vision care, life insurance, 401(k) retirement saving plans, flex plans, etc. Without PEOs, typically a small business can neither manage nor afford to offer these benefits to their employees. PEOs are able to assist clients by provisioning these benefits programs at attractive rates to employers and employees alike.
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