HR & Payroll for smaller companies
May 12, 2022
by a searcher in Chicago, IL, USA
I am acquiring a 40 employee HVAC company with $1.2M in EBITDA and have been looking at Professional Employer Organizations (PEOs) to handle the HR, benefits and payroll. I have found some of these companies to be quite expensive ($100 admin fees per month per employee) as well as set up costs.
I am wondering whether there are PEOs that are tailored for smaller organizations and that are easier on the wallet?
How are people handling the payroll and HR post close? I was thinking about using paychex and leaving HR internal.
Interested in feedback and any recommendations. Thank you.
from University of Michigan in Detroit, MI, USA
Hopefully you've already found a solution by now. But in case you haven't, my two cents are to avoid the PEO altogether. At 40 employees you are already on the larger side, and the PEO may no longer be the most cost-efficient choice.
PEOs are great if you have twenty employees or so because, even if you are paying 1200 a year for each of them to be in the PEO, that can still be cheaper than hiring additional HR staff. For reference, it's very rare to see a company with 50ish employees or more in a PEO. The benefits just don't outweigh the costs at that point.
I work closely with a lot of payroll providers. If you are still on the market for payroll services, feel free to ping me for more info.
All the best.
from INSEAD in Boston, Massachusetts, EE. UU.