There are many things about the state of New Jersey that make it unique. And while we won’t go into them all, we will focus on one important aspect of the state – small businesses are plentiful in New Jersey.
With easy access to the major cities of New York and Philadelphia, it’s not too surprising to see why New Jersey is so popular for small businesses and entrepreneurs. However, just because there are a lot of small businesses doesn’t mean that it’s easy to operate in New Jersey.
When it comes to human resources, small businesses in New Jersey face numerous challenges. The uncertainty surrounding healthcare and the Affordable Care Act
are having significant impacts on the state. There are also HR regulatory and employment law changes that have had and will continue to have significant impacts on New Jersey businesses.
These and other changes are causing HR to become far more complex and time consuming than ever before, especially for small businesses. This is where a strategic HR partnership, such as a professional employer organization (PEO)
, can help small businesses in New Jersey overcome these challenges and achieve success. But why is this the case?
New Jersey is a Small Business State
One reason why PEO is popular in New Jersey is because of the high number of small businesses that operate in the state. According to a U.S. Small Business Administration report
, as of 2015 there were more than 820,000 small businesses operating in New Jersey. This makes up 98.3% of business in the state.
Since PEOs only partner with small businesses to provide various HR services, it is easy to see why they are a popular outsourcing option for companies in New Jersey.
PEOs provide small business clients with access to employee benefits and health insurance offerings similar in price and quality to large-group plans, greatly reducing costs while significantly improving benefits plans.
This, coupled with other benefits that PEOs provide to their clients
, helps to explain why PEO clients are 50% less likely to go out of business
A PEO Helps with the Uncertainty of Healthcare and the Complexity of HR
We have already mentioned that there is an extreme amount of uncertainty with healthcare in the United States. This is leading to significant raises in both ACA and non-ACA health plan premiums.
In New Jersey, many small employers and employees will be experiencing double digit rate hikes in 2018
. This can be extremely difficult for small businesses, and can have serious implications for an organization.
This is where a PEO, especially one that operates locally, can be extremely valuable. By providing small business clients with a comprehensive employee benefit plan (which includes affordable health insurance) at a reduced price, employers are able to better compete in their markets.
Another area where a PEO helps its clients is with HR compliance, risk management, and employment laws. New Jersey is one of the few states to have a paid family leave law on the books, and small employers need to stay compliant to avoid serious fines and penalties.
It is critical for small businesses to stay up-to-date with the latest federal, state, and local law changes that impact HR. While this can be cumbersome and stressful for small business owners, partnering with a PEO provides access to compliance and risk management experts, who help ensure clients stay compliant with all law changes.
What Should New Jersey Small Businesses Look for in a PEO Partner?
When looking into PEO as a potential HR solution, there are a few important factors for small businesses to consider:
- Does the PEO have ESAC Accreditation? Founded in 1995, the Employer Services Assurance Corporation is an independent organization that provides financial assurance and national standards of operation for the PEO industry. This accreditation is recognized nationally as the gold standard for financial reliability.
- Is the PEO Certified by the I.R.S. (CPEO)? In June 2017, the I.R.S. designated a select few PEOs as the first ever certified professional employer organizations (CPEO). This designation means that a PEO has undergone a thorough review process, and met all the strict requirements set by the U.S. Government. It also means that only the CPEO is liable for federal employment tax payments (more on that here). CPEOs provide clients with greater financial assurance and peace of mind than non-certified PEOs.
- Is the PEO based Locally or Nationally? There are many PEOs in existence today. While some operate nationally and have clients in almost every state, select PEOs only operate and partner with clients in certain regions of the country. Local PEOs have a deep understanding of their markets and are experts in the regulatory environments that their clients operate in.
These are just a few things small businesses in New Jersey should look into and consider if thinking about a PEO solution for their HR needs.
Small Businesses in New Jersey Looking to Grow Should Consider PEO as a Potential Solution
PEOs specialize in helping their small business clients grow and reach business success. By allowing owners and employees to worry and focus less on HR administrative and compliance tasks, and instead focus on high-value business activities, PEOs can be a perfect partner.
Should you want to learn more about PEOs, the services they provide, and which small businesses make for the perfect PEO partner, check out our eBook by clicking on the links below. Perhaps your small business could benefit from a PEO solution this year.
Want to learn more about PEOs? Check out our eBook, How Well Do You Know PEO? This eBook provides an overview of the PEO industry as well as helpful information for brokers and employers!