Whether you were into Metallica, Nirvana or My Chemical Romance, you can be sure of one thing: your favorite high school band probably started in somebody’s garage. But they didn’t stay there. In fact, each of these bands and many others provided the soundtrack to their own generation of fans. They started small, emerged from obscurity and hit the big time.
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When a business begins to grow, getting and keeping great employees who share the vision of its founders becomes ever more important. The need to conduct the business of human resources— including recruiting, payroll and related functions— increases in importance. And so do employee benefits, like retirement plans and health insurance.
During this early growth phase, many companies turn to Professional Employer Organizations (PEOs) to handle HR. A PEO generally charges per employee, per month (PEPM) for its services. Compared to hiring staff at a considerable cost, the price tag for a PEO is reasonable, so limited company funds can be directed toward other priorities.
But as the company continues growing, it may also outgrow its PEO. As the company’s headcount approaches 50, the PEPM cost of the PEO can become prohibitive. When that happens, it’s time to hire someone in-house for HR responsibilities, and track down the right broker to help with the insurance benefits.