If you’d rather be managing staff, clients, and projects than chasing down paperwork, recruiting new staff, handling workers’ compensation audits, and generally dealing with human resources and legal issues, Dave Horan has three letters of advice: PEO.
For a couple of years, Weston Mill, the Connecticut millwork shop that Horan manages, has used a professional employer organization to outsource administrative functions that once ate into his time and might even justify hiring an additional support person.
With cabinetry orders and other workloads in a regular state of flux, one PEO advantage to Weston Mill is staffing flexibility. “It takes a lot of time to find qualified people and then keep track of them,” Horan says. His PEO also handles time-killers such as payroll, benefits management, workers’ comp, accounting, estimating, and tax filings. “On a busy week, [the PEO] probably saves me five hours,” Horan says.
Money is another advantage. PEOs purchase health and workers’ comp insurance in bulk, making them a potential lifeline to remodelers struggling to afford insurance premiums, says Jude Tallman of Blue Collar PEO, the broker that works with Weston Mill.
“What I hear builders like the best is that they know what their true operating costs are, from the labor standpoint,” Tallman says. “On small jobs, you just don’t have room for error.”
Why don’t more remodelers use PEOs, especially as the shift to small jobs adds to the administrative burden?
Besides being a relatively new concept in most blue-collar professions, PEOs are often misconstrued as being little more than temp agencies. In fact, Tallman says, a PEO makes sense for remodelers of any size between two employees and 2,000.
—Leah Thayer, senior editor, REMODELING.