How do PEOs assist their clients to contain or reduce employer-related costs and improve profitability?
Cost containment and reduction is accomplished in a variety of ways. PEOs continuously generate economies of scale as new clients and work-site employees are added to their pool. This yields the direct benefits of both reducing employment-related expenses borne by the employer and contributing to the business’ profitability. In a PEO relationship, the client may maintain only the necessary level of in-house HR infrastructure dependent upon its reliance on the PEO. In addition, the PEO provides significant time savings by managing many routine and redundant employment-related tasks for its clients, enabling the business owner to focus on the company’s core competencies and concentrate efforts on those activities that generate revenues and profits.
