In this article, Why Employees like PEOs 102, we will focus specifically on the human resource and regulatory compliance services that PEOs provide and how they positively affect the workplace for employees.
A Professional Employer Organization (PEO) will offer services that help small businesses comply with the ever-expanding myriad of federal, state and city employer laws. This is valuable for employers because they will stay clear of employment litigation, but it is also valuable in attracting and retaining quality employees that expect their employer to follow the guidelines they may be used to working for larger companies.
A great example arises when observing Family Medical Leave Act (FMLA).
FMLA requires employers to provide up to 12 work weeks of unpaid, job-protected leave, within any 12-month period, to eligible employees for certain family and medical reasons. It’s most noticed with pregnancies. FMLA is only enforced upon companies with 50 employees or more. If an employee works for a company with less than 50 employees, the employer is not forced to comply with FMLA, consequently employee may not have their job waiting for them after becoming pregnant.
However through co-employing with a Professional Employer Organization, small businesses are required to comply with regulations that apply to larger corporations. PEOs will help their clients to understand this and strategically manage for it.
For a helpful chart of employer regulations and what sized companies they pertain toclick here.
PEOs provide companies with human resource consultation and innovative workforce solutions that go beyond regulatory compliance (things companies have to do) and more into maximizing employee production and retention (things companies should do).
Its been proven that most important factors that lead to employee production and retention are employee benefits and compensation. However, applying HR strategy to a small company will also help employees feel welcomed, visible, and important while keeping employer costs down.
Reward and Recognition Programs
Professional Employer Organizations offer advice on deploying a formal employee reward and recognition program. These programs range from no/low cost choices to moderate and higher costing choices.
Employee reward and recognitions programs help companies retain top talent by challenging employees and making their achievements visible. They also provide a simple and inexpensive way to recognize employees and give incentives other than traditional raises and bonuses.
PEOs’ reward and recognition programs are scalable and easy to deploy. They allow employees to go online to select their own reward; which can vary from a employee of the month parking spot, gift certificates or a group outing to a bowling alley or restaurant.
Professional Employer Organizations provide the structure, software, and consultation necessary to implement performance appraisal programs quickly and cost-effectively. This is great for employees as it provides visible structure for their performance and is often tied to bonuses, rewards, and raises.
Employees that have worked in an environment without performance reviews can understand the frustration of not having one; cronyism, playing favorites towards management, losing great employees, etc.
PEOs can roll out a complete performance review strategy in a matter of weeks and without much administrative burden on behalf of their client. Performance appraisals are not only good for motivating employees, but they also provide necessary documentation of performance when an employee is not performing well, which is helpful when helping, suspending, or terminating employees.
Its all pretty simple, when employees are happy with their job, they will be retained, when an employer can retain their employees, they will be more profitable. Working with a quality PEO sends a message to employees that your company pays a premium to ensure that employees have a great place to work.
For more information on Why Employees like PEOs, check the next articles in the series Why Employees like PEOs 101, and Why Employees like PEOs 103.