As a Georgia engineering firm becomes a multi-state employer as it expands its operations by hiring talent remotely across state lines, they’re looking at a professional employer organization (PEO) for valuable assistance with managing growth. A PEO would serve as their co-employer, handling HR, payroll, benefits, compliance, and other administrative tasks for a workforce based in several state locations. With remote workers in Vermont, North Carolina, and Mississippi, a PEO partner offers real benefits:
Compliance Expertise
Employing people in different states subjects companies to various labor laws and tax codes in each location. A good PEO has the expertise to address local and state regulations across a distributed workforce. This includes staying up to date on employment requirements, workplace policies, employee classification, taxation, insurance, leave time laws, and termination procedures. The PEO handles compliance filings and documentation, auditing, and HR advisory services to ensure that this engineering firm remains fully compliant as it scales into new regions. This saves the time and cost of trying to independently navigate varying regulations.
Payroll, Benefits, and HR Administration
With a remote workforce, handling payroll, benefits, and HR tasks for employees in multiple states can quickly become complicated. A PEO can take on these administrative functions through its unified HR platform. This means the engineering firm doesn’t have to set up separate payroll systems for each state or manage benefits plans that align with differing laws. The PEO handles payroll preparation, taxes, filing, and disbursement as well as administering health insurance, retirement plans, workers’ compensation, and additional benefits for all employees, regardless of location. They also oversee core HR tasks like talent acquisition, onboarding, performance management, and maintaining HR records.
Cost Optimization
By pooling employees under one payroll and benefits program across state lines, a PEO provides economies of scale that optimize costs for the firm. The PEO can leverage its size to secure competitive insurance rates, gain volume discounts on HR technology systems, reduce administrative duplication of efforts, and maximize savings through improved risk management.
Reduced Liability
Working with a PEO creates a relationship that better protects the engineering business from employment practices liability claims. The PEO becomes the employer on record for tax and benefit purposes, which establishes it as the primary party responsible for HR compliance. So while the firm retains direction over day-to-day operations, the PEO bears the brunt of potential liability for employee-related issues, limiting legal exposure for the firm.
Business Growth Enablement
By partnering with a PEO, the engineering firm is free to focus on its core business mission. This allows leaders to direct their efforts toward capturing new clients, executing projects, and developing innovative solutions. With the PEO working as an extension of the HR and payroll team, the firm can drive sustainable growth, productivity, and performance.
Financial Considerations
From a financial standpoint, partnering with a PEO offers significant cost savings that generally outweigh the fees incurred. For a company with 30 employees, PEO fees typically range from $2,000 to $6,000 per month. When factoring the cost of hiring in-house payroll, HR, and benefits staff plus systems, PEO fees are quite reasonable.
In-house payroll processing for 30 employees can cost around $2,500 monthly including software, tax filings, and payroll staff time. Benefits administration including insurance, retirement plans, and leave management could require one or two full-time HR employees at $50,000 to $100,000 annually.
Additional services like HRIS systems, background checks, job postings, risk management, and compliance management can reach over $1,000 monthly. By contrast, offloading these tasks to a PEO for $4,000 monthly provides significant cost reduction. The PEO also brings economies of scale through group rates on insurance plans and volume discounts on HR tech systems that are challenging to match independently.
Operational Considerations
Operationally, a PEO dramatically simplifies distributed workforce management. For a company coordinating staff in Georgia and remote states, managing payroll, taxes, insurance, and compliance singularly is extremely complex. This diverts a lot of internal resources away from revenue-generating tasks.
A PEO provides unified systems and processes through a single platform, regardless of location. All HR functions are handled uniformly across the organization through the PEO. This consistency, transparency, and centralization of data are difficult to achieve independently.
Summary
By serving as a co-employer to manage multi-state payroll, benefits, compliance, HR, and liability risk, a PEO provides the support a growing firm needs to expand efficiently, remain compliant, optimize costs, and concentrate on its primary work as business scales. For a Georgia firm seeking to hire remote employees in states like Vermont, North Carolina, and Mississippi, forming a strategic partnership with a PEO paves the way for sustaining growth successfully.
When family coverage savings are added to an organization, PEO fees remain lower than the cost of hiring dedicated in-house staff for payroll, benefits, HRIS systems, and compliance management. Insurance premiums may be slightly higher under the PEO, but this is in exchange for reduced administrative costs and liability.
Overall, leveraging a PEO’s expertise and systems is an efficient, low-risk approach to growth. The right PEO partner will continue providing significant cost savings that increase in later years as a business expands. This highlights the efficiency and economies of scale a PEO can offer versus relying on internal HR functions.
