The pandemic dramatically shifted the expectations the workforce has of its employers, ultimately flipping the world of HR on its head. Moreover, Affordable Care Act (ACA) regulations, state-mandated wage gaps, and labor shortages are specifically affecting organizations that provide services to seniors and those with disabilities. The risks of non-compliance to these rules are overwhelming; even if you have an HR Director, it is too much for a few heads to keep up with the constant changes in regulations. If you decide to take your chances and don’t comply, you will face big fines that can cripple your business, impacting the lives of the people you serve.   What we’re seeing now is that it’s not just greater flexibility or more pay that workers are in search of—the benefits offered by employers and the delivery of those benefits matters more than ever, too. 

For facilities offering home care, skilled nursing, senior housing, assisted living, disability services, long-term care, and the like, this can be a major challenge from both a financial and resource standpoint, but professional employer organizations (PEOs) are ready to step in and help. 

Not familiar with PEOs? Let’s dive into some of the basics. 

What is a PEO?

A PEO serves as an organization that enters into a ‘joint-employment agreement with an employer by “leasing” employees to the employer.’ PEOs own and manage employee-related responsibilities and liabilities, namely typical HR functions such as payroll, benefits, tax administration, and regulatory assistance. 

In other words, through a PEO partnership, a company can outsource its time-consuming, resource-intensive HR procedures to experts and keep the focus on reaching goals and achieving milestones. 

What types of companies benefit from a PEO? 

Care providers particularly benefit from a PEO because it frees up resources and is typically more cost-effective than hiring a full-time HR team. An HR team, for example, often requires numerous experts to cover everything from payroll, ACA compliance, state regulations and licensing standards, training/development, benefits administration, and employee health and safety. Every aspect of the HR function can instead be managed by the PEO’s experts. 

More businesses leverage PEOs than you might think. The National Association of Professional Employer Organizations (NAPEO) reported that PEOs provide services to 173,000 small and mid-sized businesses, that is 15.3 percent of all employers with 10 to 99 employees. 

When choosing a PEO, look for a company that knows the specific needs of your industry.

What can you look forward to with a PEO?

PEOs often allow businesses to improve productivity, grow faster, and reduce turnover rates. In fact, NAPEO research found that businesses in a PEO partnership grow 7-9 percent faster, have 10-14 percent lower turnover, and are 50 percent less likely to go out of business. 

Employees stand to benefit from PEOs as well by potentially gaining benefits and other perks typically offered by larger organizations, such as more affordable health insurance plans, worker’s compensation insurance, retirement plan options, vision and dental insurance, and more. They also have access to HR experts who know the ins and outs of their administrative details and aren’t bogged down by other company procedures and processes. Many PEOs field employee requests, so concerns like “my paycheck is wrong” or “how do I change my direct deposit” aren’t weighing down administrators.

PEOs also help to attract new employees, which is especially important for small businesses that are up against shiny benefits packages at larger, more established businesses. A recent survey found that only 31% of companies with fewer than 50 workers offer health insurance, with that insurance coming in at much higher deductibles on average as well. This is tough on small businesses financially, and it can be a make-or-break component during the recruitment process, but PEOs help address both challenges.  

What does a PEO cost? 

The total cost for a PEO will vary depending on the size of the business (PEOs tend to charge a flat fee per employee) as well as the number of services they’d like to offer employees. Notably, NAPEO reported that the ROI of using a PEO (in cost savings alone) is 27.3 percent. 

Despite the potential returns, the decision to partner with a PEO shouldn’t be made on cost alone. Similarly to evaluating how a new hire would bring value to an organization, administrators should evaluate the opportunity costs. The HR experts at the PEO can advise the employer on compliance, thus reducing liability. Plus, by handling routine and redundant tasks such as onboarding, the business owner can focus on delivering care and growing its bottom line.

Why should care provider organizations consider a PEO?

PEOs that specialize in vertical markets can truly drill down and tackle the unique challenges and requirements for that specific industry with ease. Long-term care facilities have different needs than a retailer, for example. These organizations rely on talent with niche skill sets and specific degrees to provide care and other services for seniors and disabilities, yet many workers are experiencing burnout or are unhappy with their benefits, leading them to explore other employment options. 

PEOs that specialize in care industries can help. At Procare HR, we are the only PEO to exclusively offer HR solutions for facilities offering home care, skilled nursing, senior housing, assisted living, disability services, long-term care, and the like. We’re a team made up of HR and care industry experts who understand the intricacies of working in healthcare and can provide services that bring peace of mind to workers, so they can remain focused on their patients. 

Interested in learning more? Let’s connect! Reach out to take HR off your plate.

Sources: NAPEO; SHRM; Axios 

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