October 27, 2020 Last updated October 27th, 2020 559 Reads share

5 Reasons Your Small Business Should Be Using a Professional Employer Organization

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If you are a business owner looking to expand your company into the Canadian market, you may want to consider working with a professional employer organization (PEO). Without setting up a physical shop onsite in Canada, you can work with a PEO to help your staff and manage your local employees.

Even if you are a local Canadian small company, there are many benefits to contracting out your business’s payroll and human resources to the experts. Start-up owners know that distributed resources can be tricky, and any savings can be funneled back into their business to expedite your growth.

Drawing top employees requires businesses to focus on their compensation packages. When you work with a PEO in Canada as a co-employer, they can help you finance a fair salary and benefits package that will draw the best candidates. Let’s take a look at a few reasons that your small business could benefit from forming a partnership with a professional employer organization.

What Is a PEO?

A PEO is an independent company that will partner with your firm to manage your employee’s salaries and benefits. This means that your employees are also employees of the PEO. Within this framework, you still run your company and manage your employees’ daily responsibilities, and the PEO will oversee the human resources and payroll for your staff.

Why Partner With a PEO?

Partnering with a PEO will allow you to offer your staff competitive benefits without the enormous costs that large corporations can afford. This gives you an edge for bringing in quality employees while still at your business’s startup phase.

Reduced Benefit Costs

PEO’s help you to save money on expensive benefits plans that may otherwise be over your budget. When you have a co-employer, you can save up to half the regular benefits package cost. This gives you the advantage of being able to offer competitive packages for your potential staff.

Taxes and Payroll

When you are just starting your business, you may not yet know enough about tax law to handle your books. You may not have room in the budget to hire your accountant to take care of your taxes and payroll deductions. When you work with a PEO, you will be partnered with an expert firm to take care of your annual and payroll tax filings.

Retirement Savings

One of the largest draws for employees is a generous benefits package that includes a retirement savings plan. Company contributions to programs like a 401K can cost thousands per employee. Most new companies just don’t have the capital to invest in these kinds of employee programs. This can make it challenging to prepare attractive offers that will bring in the highest quality talent.

Sharing the burden of staff with a co-employer PEO can help you afford generous packages that will entice quality applicants. Unlike large corporations that can afford to invest millions in their compensation packages, start up companies are on a stricter budget. A PEO will also bring you the knowledge of experience and guide you through the best options for building an employee savings plan.


Suppose you are running your main branch from abroad. In this case, it can be challenging to manage the hiring process with local talent. Finding candidates in another country to fill your local positions can be a lengthy and expensive process.

A PEO firm has access to various local hiring networks and can take care of the screening process. This ensures that once you are ready to interview, you will be dealing with a small group of top candidates vetted through your trusted partner.

Insurance Costs

Once you register your business in Canada, you will have to start paying for Workman’s compensation and Unemployment Insurance Benefits. You may not be familiar with the guidelines and laws that mandate these systems and trying to manage the proper contributions can be confusing. When you work with a PEO partner, you can trust them to know each province’s laws and make the correct payments helping you avoid fines.

A quality PEO firm will be extremely detail-oriented and have an unmarked reputation in the business. Your PEO partner will be responsible for managing some of the most critical parts of your business, so it’s essential to take your time to find the right firm with which to partner.

For small business owners, a PEO can manage your recruitment efforts, provide trusted tax and payroll service, and help you finance benefits packages so that you can grow your company with the best candidates. Outsourcing these segments of your business will help you save on operating costs that can be funneled back into your company’s growth.

Young attractive woman in a job interview -DepositPhotos

Samantha Black

Samantha Black

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