PEO - Employee Leasing

In a competitive environment, construction businesses are faced with the difficulties of increased labor costs and the pressure to stay within - or below - set budgets. Innovative companies are continuously looking for ways to increase productivity while lowering expenses. And one service many have recently unearthed is construction employee leasing.

As with any cyclical industry, there are times when the cost of keeping a workforce is prohibitive while, at other times, the demand for services outstrips workforce availability. Construction employee leasing firms are a viable and cost-cutting solution to this problem.

Here's how.

Benefits of a construction PEO

Professional employee organizations (PEOs) offer a cost-effective alternative to hiring permanent employees by providing outsourced labor, as well as all the costs and responsibilities related to having employees. The flexibility of getting employees "as needed" allows companies greater flexibility in bidding for multiple projects. It's also ideal for firms that lack working capital or can't find labor elsewhere.

Plus, human resource responsibilities such as payroll, worker's compensation, and other employee-related tasks are overseen by the construction PEO, further lowering expensive administrative costs. Within this realm, they also ensure your firm is in full compliance with the nearly 200 federal labor laws resulting from legislation that includes:

• Fair Labor Standards Act (FLSA)
• Family Medical Leave Act (FMLA)
• Immigration and Nationality Act (INA)

What to expect

Most construction PEO firms require just one payment to cover payroll, taxes, benefits, and the PEO's fee (which is tax-deductible in most cases). This buys you services that should include:

• Complete payroll and payments
• Payroll taxes
• Human resources management
• Unemployment claims
• Assistance with regulatory claims
• Workplace safety program
• Availability of insurance and fringe benefits package
• Health insurance administration
• Employee handbooks (if necessary)

In addition, contracting should be flexible to allow workforce increases or decreases depending upon the project's progress.

A flexible, cost-effective workforce

The most attractive aspect of hiring construction employee leasing firms is their ability to provide experienced employees quickly and efficiently. These firms assure their clients that workforces brought on to sites are thoroughly screened and checked and ready to be put to work. Once the job is finished, the workforce can be let go without ramifications to the construction company: the construction company faces no financial burden related to the termination of employees.

A flexible workforce further allows construction companies to bid on multiple projects at once without worrying about having enough employees. This offers companies greater flexibility with finding new sources of revenue.

Plus, using a PEO can actually reduce your labor-related costs. By enabling you to obtain fringe benefits at lower rates, not to mention the savings on workers' comp and personal administration, PEOs have the potential to reduce your costs dramatically, often more than making up for their service fee.

Selecting a construction PEO

Prior to outsourcing construction resources, companies must evaluate their needs and any issues related to managing their employees. Once this has been defined, the company will have a better idea on the various services it will need as it interviews each construction PEO.

In particular, be on the lookout for these two indicators:

1. Compliance. Since construction employee leasing firms work by taking over a company's workforce responsibilities, it's important to make sure the construction PEO you select acts in accordance with all government regulations. The National Association of Professional Employment Organizations offers a directory to make the search for a reputable construction PEO easier.
2. Accreditation. The Employer Services Assurance Corp (ESAC) is also important because firms accredited through ESAC must pass a vetting process. This assures you that firms you're considering have the experience to meet their financial obligations and employment needs.

Ready to get the staffing assistance your construction business needs? Use BuyerZone's free request for construction employee leasing price quotes and we'll match you to multiple PEO services in your area.