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HOW VENTURE CAPITAL FIRMS CAN BENEFIT FROM USING PEO SERVICES

Whether you provide early-stage financial capital to growth startup companies in IT, biotech, software or other ventures, PEOs (Professional Employer Organizations) are here to help your investments come to fruition quicker while reducing risk and cost.  

PEOs are large employer companies that handle Payroll, HR Administration, Worker’s Compensation and Employee Benefits.

Accelerating your startup growth

PEOs help your ventures accelerate their growth in two ways:

PEOs help free the time management spends in non-core business activities so they can increase productivity and generate revenue. 

Some examples of these non-productive activities are HR administration, keeping up with labor laws, adding and removing employees from health benefits, dealing with employee handbook issues, etc.

PEOs allow access to high level employee benefits to help attract and retain top talent to your investment companies.  It is these talented employees who will drive the success of your investments quickly and effectively.  Many PEOs will provide a wide array of benefits ranging from HMOs to Executive level PPOs.

In addition to the above, PEOs are good platforms for quick growth and scalability.  When hiring is on the rise, PEOs can handle proper employee integration quickly at minimal cost and in accordance with all labor laws.

Cost reduction in startup management

PEOs help your ventures reduce their cost in the following areas:

PEOs through their large employee count have the ability to purchase health insurance and other employee benefits in large quantities.  These economies of scale are passed on to the companies they service as an additional incentive to them.

Much like health insurance, worker’s compensation can provide additional savings in a similar fashion.

Many PEOs offer complementary with their services an EPLI (Employment Practices Liability Insurance) as part of their package.

Besides the above cost saving areas, PEOs often times are also able to offer their State Unemployment tax rate for the client to use further reducing costs. 

Most importantly the costs which are often ignored are the soft dollar costs that can be saved.  When management is not utilizing their time in these areas, their time value is recuperated and reallocated.

Regulatory compliance

Let’s face it, your venture companies’ management teams are not necessarily experts in labor laws, HR and insurance.  PEOs on the other hand are in the business of becoming experts in these areas.

One of the first things PEOs do when partnering with a new company after setting up their payroll is to review and revise their employee handbook.  

This revision will ensure the client is compliant with current labor laws. It reduces any chances of incurring fines as well as the risk of employee lawsuits. PEOs conduct training in the areas of proper hiring and terminating employees, sexual harassment and discrimination.  

PEOs through training and up keeping of employee handbooks can avert a possible occurrence which can cripple your new venture company. 

The last thing one needs is a disgruntled employee blowing up the entire operation. It is important to remember, PEOs do not eliminate this risk but it dramatically reduces it.

AS PEO brokers and consultants, The Huldisch Group will help you find the best suited Professional Employer Organization to partner with your Venture Investment. 

We are vendor neutral and our only goal is to make sure you have the best PEO partner out there. 

With PEOs, one size does not fit all and different PEOs should be selected for each company depending on each client’s needs and characteristics.  

To find the best fit for your business and maximize your benefits contact us today and we will take care of everything for you.