Posts tagged human resources
Beware of PEO Tactics

Recently, we released our own e-book, Get More Done with a PEO, which goes into detail about what a PEO is and how it can help your business. In last week’s blog,we discussed the costs of a PEO and why transparency is so important. Transparency is a key to making sure our customers know what services they will be receiving and paying for. 

After working with and talking to several different companies about their HR needs and current PEOs, our CEO, Mike Kelly, has identified 4 PEO Tactics to be aware of when deciding which PEO is right for your company. 

1. Mark up on the taxes you pay each month.

The government has outlined how much you should withhold monthly for employees, and when you work with a PEO, they ensure the proper amount of taxes are paid.

However, unless you are familiar with the tax rates and scrutinize your bill, you may end up paying more per employee. Some PEOs may add 1 to 2 percent to the tax rate to pad the amount, hoping that you, the business owner, never notice.

2. Minimum Contract Requirements

Some PEOs require their salespeople to obtain a minimum contract amount per client. Therefore, companies with fewer than ten employees seeking the PEO’s assistance may be quoted a high price per employee to hit that minimum amount. Be sure to ask up front if there is a contract minimum in order to engage the PEO, and if so, shop around to find a company who doesn’t have one to make it more economical for you.

3. Percentage of Payroll vs. Fixed Rate

If you have a small team of high-income employees, you need to be aware of how your PEO fees are calculated. If your PEO charges a percentage of payroll, rather than a fixed fee per employee, then you may be paying too much for PEO services.

4. Unclear Billing

Many PEOs offer bundled services for one price, so when the invoice comes, you’ll see a bill without any details or explanation of exactly what you are paying for. How will you know if you’re overpaying for a service, or paying for one that you don’t need? Ask for an itemized bill to make sure your costs line up to what you discussed.

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We believe transparency is incredibly important when working with different companies and clients. We wanted to highlight these different tactics so that you are aware and educated when trying to make an investment in your company, such as using a PEO. 

Find more information about PEOs and why FullStack might be the right PEO for you in our e-book, Get More Done with a PEO. 

Why should you outsource your HR needs and how will this help your business?

Last week we released our very own e-Book, Get More Done with a PEO, which goes into detail about how a PEO can help your business grow. In last week’s blog, we discussed what a PEO is and some of the tasks that are typically delegated to a PEO. You can find more information about those specific topics here:

Now that you know and understand what a PEO is, there are a few other questions to address when considering if outsourcing HR is the right choice for your company. 

Questions such as: Why should your outsource your HR to a PEO? How will it help your business? How will it help your employees? 

Let’s face it – running your company is time-consuming. You’ve got a lot on your plate, from scaling and marketing to figuring out product-market fit. Partnering with a PEO frees up time to focus on running and scaling your business.

When we interviewed Meredith Gradle, CEO of Iris Works recently, she said this best: “FullStack helps me to be a fulltime CEO and business owner as well as a full-time parent.  And honestly, I wouldn’t know how to do it without them. It gives me flexibility when I come home I can actually be at home and be present with my kids, and I don’t have to worry about all the things FullStack handles for me.”

You didn’t start your company to spend half your day dealing with HR issues. You started your tech company to solve a problem — to introduce an innovative approach to an established system.

PEOs handle the transactional HR items that are important for your business to run smoothly. A PEO can also work with your company’s existing advisors on your behalf, freeing up more of your valuable time. By doing so, your company can experience growth more quickly. The National Association of Professional Employment Organizations found that companies that use PEOs grow 7 percent to 9 percent faster than companies that don’t use PEOs.

Reclaim Valuable Time

When you start your own company, you don’t have the luxury of walking into an established corporate structure with support staff who can answer questions and explain income taxes or the difference in benefits packages. Chances are, you don’t know the first thing about mitigating employment risks or insurance. Why spend time researching information about complicated HR issues when you could work with an advisor that has helped companies just like yours?

You and your employees gain access through a PEO to an experienced HR staff that is knowledgeable on local, state, and federal taxes and regulations. The PEO will make sure that the proper amount of money is withheld from your employees’ paychecks each pay period.

Avoid HR Headaches

Are you familiar with federal anti-discrimination laws that apply to prospective and current employees? What about safety laws or wages laws? Chances are, you’re not. You know the tech industry, not issues that fall under the HR umbrella. But a PEO knows how to comply with these laws and others that impact your company and employees.

Create a Better Employee Experience

Working with a PEO that specializes in your industry and marketplace benefits both you and your employees. You save time both up front and during your partnership because the PEO already understands what challenges a small, tech company in the Midwest faces. A PEO in the tech industry has experience working with various early-stage companies and the people needed to scale those companies. It will already know what benefits you’ll need to offer to attract and retain top talent.

Do you want to reclaim valuable time, avoid HR headaches, and create a better employee experience? 

If this sounds like you, then a PEO might be the right option for your company and employees. Find more information about how a PEO can save your company time, reduce risk, and create a better employee experience in our e-book, “Get More Done with a PEO.”

E-Book Release!

We are excited for the release of our e-book, “Get More Done with a PEO,” which you can download here:  In conjunction with the release, we are going to be highlighting particular focus areas each week in June & July.  It all starts with these two questions:

What’s holding your business back from growth? Are you spending time on the right things for growth - or the administrative tasks of your company’s HR and operations?

If this sounds familiar, you know you need to make a change. It’s time to turn to a trusted adviser to remove the burden of transactional HR and free your time to focus on revenue.

As the tech scene is exploding in Indiana, companies need to find a way to attract and retain talent. What does the workforce want when it comes to choosing where to work and why to stay there? They want a strong company culture, opportunities for growth and development, and traditional benefits.

Here at FullStack, we want small business owners to know their options and understand just how a PEO can help their business grow. We believe that when companies can outsource their administrative HR needs to a PEO, that company is able to focus more on bringing their ideas to market and generating revenue.

What is a PEO?

A PEO is an HR outsourcing firm that enters into an agreement with a company to share responsibility and liability for its employees in the areas of Compliance, Employee Relationship Payroll and Benefits Administration, Workers’ Compensation, and Risk Management. The arrangement allows small companies to be able to offer highly sought-after benefits, such as 401(k) and health care benefits, to employees at costs much lower than if the company were to obtain them independently.

The demand for tech talent is continuing to flourish in Indiana and the Midwest. Companies that offer benefits make themselves more attractive to current and prospective employees. Working with a PEO can help you affordably offer these lucrative benefits that otherwise may have been cost-prohibitive for your company.

What do I delegate to a PEO?

At a minimum, the PEO will monitor and administer payroll, benefits, workers compensation, 401(k), compliance regarding taxes, employment law and other HR matters, as well as drug testing and background checks.

You decide who to hire and what benefits to offer. The PEO then handles the onboarding process or working with benefits providers. This process frees up the much-needed time for company leaders to focus on growing the business.

Do you want to spend more time focusing on bringing ideas to market instead of HR or administrative tasks? Do you want your company to grow?

If this sounds like you, then a PEO might be the right option for your company. You can find more information about what PEO is and how it can help improve your business, in our eBook, “Get More Done with a PEO.”

Why Use a PEO?

‘Tis the season for the holidays, where we are all making plans for how we will spend our time with family and friends over the next few months, what gifts we want to give to whom, and what who is going to cook what for the various holiday meals!  I personally am looking forward to making my pumpkin pie recipe that I make from scratch with baking pumpkins grown locally!

‘Tis the season also for business leaders making significant decisions for the next calendar year, including employee benefits open enrollment or shopping benefits providers to start providing new benefits.  You may be considering a PEO as your benefits provider, along with the other perks of partnering with one (payroll, compliance, strategic support). Therefore, as the newest member of the FullStack team, I want to share with you how I am answering the question, “Why use a PEO?”  Let’s look first at the statistics provided by a third-party research firm for the National Association of Professional Employer Organizations (NAPEO) - see references cited below for the link to the research.

  1. PEO Expansion - As of 2017, approximately 3.7 million employees in the U.S.A. were served by PEOs, growing progressively every year since 2008 (1.8 million employees served)

  2. Financial Save - Companies save approximately $450 per year in administrative costs by utilizing a PEO.

  3. Survival & Growth - Companies who utilize a PEO are 50% less likely to go out of business, and grow 7-9% faster than companies who don’t use one.

  4. Employee Retention - Companies using a PEO have 10-14% lower employee turnover

Allow me to expand on the second and fourth points from my experience as an HR/OD consultant and leadership coach working with many business and nonprofit leaders, and as a small business owner myself. A PEO is a one-stop-shop for payroll, benefits, and compliance.  Many small businesses use separate vendors for all three, which means separate invoices, and having to communicate with CPAs, benefits providers, and attorneys respectively for their specialized services. Not only will working with a PEO save companies substantial costs per employee, it will also save leaders incredible amounts of executive time and energy to work with multiple vendors and troubleshoot challenges.  PEOs take care of this with all the respective vendors on behalf of our clients.

As a result of this time and energy save, leaders are less frenzied, and are freed to focus on the essentials of the business.  At FullStack, we believe one of these essentials is creating a healthy company culture where leaders are intentionally investing in the development of its team members.  Not only do we encourage our clients in this priority, coaching and consulting support in this strategic arena is a key offering we call “Empathy Services.”  As people who have started businesses and helped run them at early stages, we empathize with the challenges leaders are facing and strive to be a support to them in these.  This is not something you will find at every PEO, but something that differentiates FullStack. In the next few weeks, we will share stories of how we’ve supported our amazing clients.  Don’t hesitate to contact us if you’d like to learn more.

References Cited

  1. NAPEO White Papers - Research conducted by McBassi & Company -