Do small businesses offer big benefits through PEOs?

Good worker benefits are often the main aspect that boosts worker satisfaction. Professional employee organizations (PEOs) often offer a growing source for benefits, employment-related services and human resources expertise. Because PEOs offer such great benefits, employees go to work with much happier thoughts.

The National Association of Professional Employee Organizations has provided us with some PEO industry statistics. Here they are:

  • Number of PEOs in the United States: approximately 700
  • Average length of a PEO contract: 1 year
  • Average number of employees for a PEO client: 16
  • Number of states that require PEOs to be licensed: 20
  • Average number of Americans co-employed by a PEO: 2 to 3 million
  • Average gross pay per employee: a little more than $25,000

Milan Yager, executive vice president of the National Association of Professional Employer Organizations (NAPEO), said, “Small businesses want to add or upgrade their benefits to complete effectively for the best talent and retain good workers. They are learning that PEOs can provide great benefits efficiently and cost effectively. An estimated 40 percent of business clients entering a PEO arrangement significantly upgrade their total employee benefit packages.”

Because so many employees lack health insurance, these benefits that are offered directly through the job are very convenient and probably one of the major reasons so many employees join jobs that provide these benefits.

However, many employees don’t realize that besides being a part of group health insurance, they can also purchase individual health insurance which will be with them no matter where they work.

Even though group health insurance is usually much cheaper for the employee, that doesn’t meant that it is always the best choice. Consider purchasing an individual policy. If you can’t afford to purchase an individual health insurance policy, consider the following tips:

  • Create a tighter budget
  • Shop around
  • Purchase an HMO plan
  • Don’t purchase coverage that you don’t need
  • Look for good deals