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Short powerpoint slide show detailing the value of a PEO relationship
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Changing Conventional Thought
Jeff Jefferson President & CEO
Actum is a Richmond, VA based, Veteran Owned, SWaM Certified HR outsourcing services firm.
Over 50 years of combined experience in HR, Recruiting, Sales & Marketing, & Small Business Management.
Founded in 2009 to help Entrepreneurs Grow their Businesses.
Professional employer organizations (PEOs) enable small businesses to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation.
PEO clients focus on their core competencies to maintain and grow their bottom line.
A PEO adds value to its customers because it provides:
Relief from the burden of employment administration. A wide range of personnel management solutions through a team of professionals. Improved employment practices, compliance and risk management to reduce liabilities. Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market. Assistance to improve productivity and profitability.
Large companies with HR Departments employ “Human Capital Management” strategies to increase shareholder value.
Smaller companies with limited HR expertise are at a competitive disadvantage to larger companies, and they don’t make as much money per employee.
A Professional Employer Organization (PEO) makes large company HR expertise available to smaller businesses at a small fraction of the investment of hiring all that expertise on their own.
And here’s how…
CPA Firm – Expertise in:
Audit & Review ServicesTax Code
Estate PlanningSuccession Planning
Internal ControlsFinancial Automation
Law Firm – Expertise in:
Business LawContracts
Corporate StructureLawsuit Defense / Initiation
Real Estate
PEO – Expertise in:
Recruiting & SelectionTraining & Development
CompensationBenefits ManagementEmployee Relations
Gov’t Compliance / HR RecordsHealth & Safety
YourBusiness
Business Owners use a portion of the expertise of specialists to protect and help their business grow.
The PEO industry was recognized as "the fastest growing business service in the United States during the 1990s." The PEO industry now generates approximately $65 billion in gross revenues annually (Source: The Harvard Business Review)The PEO industry provides access to employee benefits for as many as 3 million working Americans. (Source: Bureau of Labor Statistics)By the year 2020, more than half of American employees will be employed by Professional Employer Organizations (PEO) (Source: US Department of Labor Statistics)49% of all employers will be sued by an employee in the next year (Source: EEOC)Industry growth is on a 15% rise (Source: NAPEO)3-7% of a company’s payroll hours are spent on administrative, non-core activities (Source: U.S. Chamber of Commerce)An SBA study estimated that the average small business owner spends between 7% and 25% of his or her time handling employee-related paperwork.
From 1980 to 2000 U.S. employment laws and regulations grew 60%!
SBA Reports average cost of governmentpaperwork and tax compliance for small businesses w/ less than 500 workers:
$5,000 per employee per year!
Businesses with less than 20 employees pay:$6,975 per employee per year!
Study by the Society of Human Resources Management Foundation
Three universities’ researchers surveyed 500 businesses using PEOs.
Conclusion:Using a PEO improves their businesses.
PEO clients saved time and money.Average savings of $12,000 ($600 per employee per year with an average of 20 employees)
Additionally, compliance with Federal, State, and Local employment and hiring laws, reduce the employer’s exposure to litigation, saving many businesses substantial time and money.
Average time savings > 9 hours per weekPEOs allow small to mid-sized businesses to focus on revenue-generating activities… a competitive advantage. PEOs make a tangible difference.
40% of firms in a PEO arrangement “significantly” increase their total employee benefits offering. PEOs offer access to:
Health care, vision care, dental careLife insurance, disability insuranceA 125 cafeteria planEmployee Assistance Plan (EAP)Credit union, direct deposit, savings bond programFamily and medical leave coverage, COBRA coverage, adoption assistance, and more
SBA reports fewer workers in small businesses have access to a 401(k) program.
19%, down from 28%
Actum offers a 401(k) retirement savings plan at no cost to the employer.
The PEO is responsible for the “business of employment.”Pays wages and employment taxes.Improves labor law compliance.Provides access to benefits.Delivers HR services.
Employer
ActumWorksite Employee
1 2
3
4
Co-Employment1. Employment
relationship with / and responsibilities of the client
2. Service Contract3. Employment
relationship with / and responsibilities of the PEO
4. Shared PEO and client relationship and employment responsibilities
Under the PEO arrangement:Workers remain employees of the PEO clientCurrent statutes recognize that workers can have more than one employer.Sharing and allocation of employment rights, responsibilities, and liabilities.
Through a co-employment relationship, small organizations access the economies of scale enjoyed by large corporations.
PEOs offer small businesses premium benefit packages and retirement plans, typically only available to larger employers. Costs related to monitoring of, and compliance with, employment laws are reduced, as are the often significant costs of failure to comply with such laws.In addition, the PEO provides time savings by handling routine and redundant tasks for its clients. This enables the business owner to focus on the company's core competency andgrow its bottom line.
Client 1 (6 employees)
Client 3 (2 Employees)
Client 2(8 employees)
Client 4 (14 Employees)
Client 5(10 Employees)
401(K)Health Benefits
Workers’ Compensation
Ancillary Benefits
Payroll HRConsultant
Client 1 (6 employees)
Client 3 (2 Employees)
Client 2(8 employees)
Client 4 (14 Employees)
Client 5(10 Employees)
401(K)Health Benefits
Workers’ Compensation
Ancillary Benefits
Payroll
Actum-All Clients combined on
Actum’s FEIN-True Buying Power
-- 1 Vendor For All HR Needs
HRConsultant
Actum’s fee structure is based on employee headcount. By consolidating vendors through an HR Outsourcing arrangement with Actum, small businesses can leverage economies of scale and avoid the commissions paid based on higher insurance premiums.
Costs associated with all aspects of
the employment relationship
when outsourced to
Actum
Client shareholder value = ability to grow business / hire additional
talent:Increased
profitability for Actum