Tag Archives: economies of scale

Saving a bundle on workers compensation insurance

Generally speaking, PEO, or other HR outsourcing solution, can save their clients upwards of 10 to 25% on their current workers compensation insurance.

How can they do that?  By better managing the risk management and billing process over a larger group.  Again, this is basic economies of scale.  If you are a 25 man manufacturing company, doesn’t it stand to reason that you would be better served piggy-backing on a larger company’s insurance program as they have the capacity to manage claims and cut costs?

In addition, most PEO’s, offer pay-as-you-go workers compensation insurance.  So the “big deposit” and/or make-up payments at the end of your insurance year are no longer a factor.  Giving smaller businesses a more flexible cash flow.