As an HR leader, you know firsthand how overwhelming it can be to tackle every aspect of human resources in-house. From staying compliant with employment laws to managing complex benefits plans, HR tasks are unending and ever-changing. The burden weighs on your team, draining time that could be better spent on strategic initiatives. This post discusses a per-employee flat fee Professional Employer Organization (PEO) agreement.
Fortunately, partnering with a Professional Employer Organization (PEO) offers a turnkey solution. Many PEOs make their services available with several pricing options, including the flat monthly fee per employee. Here’s an overview of how this simplified PEO billing structure can benefit your HR department.
All-Inclusive HR Services for One
Predictable Rate
With PEOs, you pay a flat per-person fee each month that bundles together a full suite of HR services. This consolidates payroll, benefits, compliance, technology, and more into a single predictable line item. There are no surprises or à la carte add-ons.
This consistency allows for better budget planning compared to piecing together numerous HR outsourcers. The flat fee also covers fluctuating HR labor costs month to month. Whether an employee requires minimal or extensive support, you pay the same rate.
Access to Fortune 500-Level Benefits
By pooling together employees from multiple client companies, PEOs gain buying power to secure group discounts on major benefits plans. This allows them to offer SMBs corporate-level perks like:
- Health, dental, and vision insurance
- 401(k) retirement plans
- Life and disability insurance
- Pre-tax spending accounts
Your flat monthly fee efficiently opens the door for your team to enroll in enhancements that would be costly to broker alone.
Cost Savings Through Economies of Scale
PEOs leverage their collective bargaining power to score discounts on payroll systems, compliance resources, HR technologies, insurance plans, and more. These wholesale savings get baked into the flat monthly rate, lowering your overall HR outsourcing costs.
It’s like shopping at a bulk warehouse versus a convenience store. PEOs do the heavy lifting to negotiate group pricing so you access premium HR tools and support at a reduced cost.
Mitigated Compliance Risks
Staying compliant with constantly changing federal, state, and local employment laws is exhausting. PEOs have specialized teams that proactively monitor regulations and make necessary adjustments across client companies.
This provides built-in peace of mind that your policies, handbooks, safety programs, and workplace procedures will satisfy legal requirements. PEOs also handle filings, paperwork, and compliance incident responses to reduce HR liability.
Strategic HR Guidance
While handling tactical tasks, PEOs also provide big picture HR advisory services covered by the flat rate, including:
- Organizational design and workforce planning
- Job architecture development
- Performance management protocols
- Terminations and dispute resolution
Leaning on PEO expertise for strategic direction allows your department to focus on culture, engagement, and talent development initiatives that directly fuel your organization’s goals.
Evaluate Potential PEO Partners Carefully
Keep in mind that PEOs range drastically in quality, capabilities, experience, and value delivery. Thoroughly vet potential partners and ask questions like:
- How many years have you been in business? Look for longevity and stability.
- Can you provide referrals from current clients in my region and industry? Find out what their partnership has been like.
- What HR technologies and systems do you provide access to? Look for modern solutions that enhance capabilities.
- How flexible is your monthly per-employee fee structure? Seek transparent rates and policies.
Take time to confirm a PEO can truly extend your HR capacity before entrusting them with your workforce. The ideal partner will feel like an extension of your leadership team.
Relieve Your HR Burden with a Simplified PEO Fee
A flat monthly per-employee PEO fee takes the guesswork and stress out of outsourcing HR functions. This straightforward billing model provides your department with economies of scale, risk mitigation, and access to systems otherwise out of reach.
Though it can be frustrating at times, HR administration doesn’t have to consume your budget and cannibalize headcount. The right PEO frees up your time and resources to focus on impactful initiatives. Consider how consolidating with a trusted partner could transform your HR capacity and allow your talents to shine.
