Top 10 Questions Asked About Using a PEO


Human_ResourcesHiring a PEO is a big step for your business, and you undoubtedly have questions about how your daily operations and responsibilities will change. In this post, we answer ten of the most commonly asked questions from our clients about how the PEO works and what that means for your business.

1. Can a PEO provide me with better health coverage than I can find on my own? 

Yes. Because PEOs work with large numbers of people, they have more buying power and can usually get better group rates. They may also have unique programs for health insurance that offer better solutions than a small employer can provide individually. Rates may vary based on specific circumstances, but in general, a PEO can provide better coverage and benefits options. They can also help you customize your benefits package to include dental insurance, vision insurance, health savings accounts, college funds, and other options.

2. What does the onboarding process for a new employee look like?

The PEO will help you get each employee enrolled in the new system using either face-to-face interviews or electronic onboarding. Most PEOs will provide handbooks outlining the employee’s options and procedures for interacting with the PEO. A PEO can also help you with recruiting, job descriptions, and job applications when you need to fill positions on your current payroll.

3. How do employees interact with the PEO?

Most PEOs will give the employer the option of whether employees have direct contact with the PEO or whether they go through a company representative. If desired, the client can have a liaison on-site to interact with employees. The PEO may also take a “train the trainer” approach, in which employees go to their managers with questions and needs.

Other interaction opportunities include a website where employees can view pay statements and benefits, a service center to answer employee questions by phone, training seminars regarding safety, benefits, or compliance, and notifications by mail. The client company usually has plenty of flexibility in determining how much direct interaction employees have with the PEO.

4. How much liability goes to the PEO vs. the business owner if there is a legal action against the company (sexual harassment, wrongful termination, etc.)?

The PEO provides liability insurance that will cover the business up to a specified amount for various types of claims. The client will usually be responsible for a portion of the claim, and this amount may vary based on the type of claim incurred. The insurance policy is designed to ensure that a lawsuit doesn’t cripple the business.

5. How much assistance does the PEO provide in settling these disputes and at what cost to me?

The PEO may retain legal counsel to help resolve legal claims. The cost of this counsel and of any HR tools designed to minimize risk will be included in the PEO’s fee. If the claim is tried in civil court, additional fees may apply.

6. Who handles state unemployment taxes and claims? Do I have to do anything, and what is the extent of my involvement?

The PEO handles state unemployment taxes and claims. The business owner may need to provide necessary data and will also be responsible for any claims filed by employees not on the PEO payroll (such as those handled before the client hired the PEO).

7. Will I lose control of certain aspects of my business if I hire a PEO?

The PEO will assume responsibility for administrative tasks, payroll, safety compliance, risk management, and benefits administration. This frees the business owner up to manage the operation and growth of the business. If desired, the PEO can also help with recruiting and hiring on an as needed basis. In these cases, the PEO handles pre-screening of candidates and initial phone interviews, but the client retains power over hiring decisions.

8. PEOs are responsible for paying payroll taxes for their clients. How can I be assured the PEO will properly remit my state and federal taxes?

As part of the process in vetting a PEO for your company, you have the option to ask them to present you with a letter from a certified CPA showing proof of timely tax payments. This will be more credible if the CPA is not “in house.” You are also within reason to ask for quarterly financial statements as proof of tax payments. Many PEOs are certified by the Employer Services Assurance Corporation (ESAC), which imposes standards for financial and operational compliance. The ESAC also provides quarterly reports, including verification of accurate payments.

In addition, the PEO may have an insurance policy for financial protection and should provide documentation of tax payments. As you research and compare PEO offerings, be sure to ask about each company’s verification and accreditation process.

9. What types of training will the PEO offer?

Most PEOs offer numerous training classes, some as many as 300 or 400. These classes cover a wide variety of topics including sales development, managerial training, blue collar courses, safety courses, sexual harassment, diversity training, worker’s compensation, compliance information, and much more. The client can usually choose whether to conduct the class online or have a live representative come and teach on site. Online classes can be scheduled immediately, while those requiring a live teacher will need to be scheduled in advance.

10. Can the PEO do anything without client consent?

No. All actions taken by the PEO are stipulated in the agreement. The PEO cannot make decisions for your business or implement changes without your consent.



As you research PEOs, keep track of the various benefits, services, and opportunities each one provides. You can easily narrow down your search using our PEO Matching Tool. This ‘go to’ list will help you choose the provider that can best meet the specific needs of your business.



 

5 Ways to Leverage the Power of Social Media for Hiring

social_media_recruiting.Social media isn’t the new kid on the block anymore. Almost everyone has a Facebook account, and LinkedIn has become a standard networking tool in most industries. While most businesses now have a presence on Facebook and Twitter, many don’t utilize these tools to their greatest potential, especially when it comes to recruiting and hiring. Social media outlets offer excellent opportunities for referrals and networking opportunities, but in order to gain the most benefit, businesses should be active in multiple ways.

How to Maximize Your Social Media Hiring Potential

In order to find the people you’re looking for, you need to go where they are. While 94% of recruiters are active on LinkedIn, only 36% of job seekers are. That doesn’t mean LinkedIn isn’t useful, but it does mean that it should be one of several tools in your social media toolkit. Let’s take a look at five ways you can put social media to work for your hiring process:

  • Publish Job Openings

    Not only should your jobs be accessible on sites like CareerBuilder, Glass Door, and Indeed, but you should also post them on Facebook, Twitter, and LinkedIn. According to Jobvite, 76% of the people who used social media to search for a job found the position they now hold using Facebook. Facebook and Twitter make it easy to share positions with job-seeking friends, and those word-of-mouth referrals are more likely to complete the hiring process faster and stick around longer.

  • Network With Industry Insiders

    Most business professionals use LinkedIn to network with others in the field and find potential job candidates. If you don’t maintain an active presence on LinkedIn, now is the time to flesh out your profile, join groups, and establish your name in your industry. When the time comes to hire, you’ll already know which people can point you toward the best candidates.

  • Generate Referrals

    Employee referrals are some of the most effective recruiting resources you have at your disposal. You can join the strength of your employee referral program with a robust social media presence to reach people who will be a good fit for your business.

  • Reach Out to Passive Candidates

    Passive candidates are people who aren’t currently looking for a new position, but would be open to the right offer. Three-quarters of currently employed individuals fall into the passive category, and only 15% say they would not be open to a job change. Social media is a great way to reach out to the other 60%, especially if you find someone with the right blend of technical qualifications and soft skills.

  • Conduct Background Checks

    Social media offers excellent opportunities for learning about the social lives of potential candidates. Social profiles and posts can either highlight red flags or underscore a candidate’s suitability for the position.

Social Media as Part of a Robust Recruiting Strategy

Word of mouth referrals and social media contacts certainly offer numerous opportunities for recruiters to connect with potential job candidates. However, they are best utilized as part of a comprehensive recruiting strategy in order to correct for any potential bias within the targeted population. In order to maintain a diverse, equal-opportunity workforce, companies should utilize the power of social media while also establishing robust diversity recruiting strategies that make available positions equally visible to all members of the workforce.

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What Does the Affordable Care Act Mean for Your Business?

Affordable Care ActMarch 23rd marked the fifth anniversary of the enactment of the Affordable Care Act (ACA). Designed to make health care insurance available to more people, the ACA brought with it a host of new regulations and compliance concerns for businesses. As provisions of the bill begin taking effect, companies need to know exactly what the law will require of them and how they can prepare for the changes.

The Big Picture

 On January 1, 2015, businesses employing more than 100 full-time employees were required to begin offering affordable health care options or face a penalty. Businesses employing 50-100 workers will need to offer coverage beginning in 2016. Compliance with all of the provisions of the law will mean answering questions about many elements of day-to-day business, such as:

  • How many full-time employees are on your payroll? The ACA considers a full-time employee to be someone who works thirty hours or more.
  • Will any of your employee benefits be affected by the Cadillac tax? The Cadillac tax applies to situations in which the employee health benefit exceeds specified statutory dollar limitations. Coverage that exceeds this limitation will be subject to a 40% excise tax.
  • Do you utilize the services of any temporary workers for which you will be responsible? The ACA considers short-term temporary workers to be employees of the staffing agency through which they obtained the assignment. However, long-term contingent workers may be considered employees of your business; as such, they would count toward your full-time workers total.
  • Are you prepared for employer reporting responsibilities? Employers will be required to fill out new forms using indicator codes to demonstrate both availability of coverage and affordability of coverage. Accurate submission will require a clear understanding of the needed forms and associated codes.

Why Hiring a PEO May Be the Best Move for Your Business

As the Affordable Care Act takes effect, many businesses may benefit from the services of a professional employer organization (PEO). One responsibility of the PEO is to handle compliance and regulatory issues. As the ACA brings significant shifts in how employee health coverage must be handled, a PEO can help you:

  • Navigate the changes necessitated by the law. Failure to comply means hefty penalties for your business, even if the mistake was unintentional. A PEO will ensure that your business remains compliant as the law unfolds.
  • Reduce health insurance rates. Because the PEO has a large pool of employees under its umbrella, the organization will often qualify for better rates than you could get as an individual business.
  • Handle administrative issues associated with coverage. Health insurance administration can be complex and time-consuming. Small business owners can shift that responsibility onto the shoulders of the PEO, freeing them up to focus on core business tasks.

 We still do not know all of the ramifications that the Affordable Care Act will have on small businesses. As the law unfolds over time, a PEO can help your company remain compliant with the law, while giving you the freedom to run your business successfully.

A Lesson in Smart Business Management from the Masters Golf Tournament

golf tournamentAnyone who watched Jordan Speith completely dominate the Masters tournament – one of golf's four majors – this past weekend could not help but be impressed by his mastery of “course management.” He is not the longest of hitters nor the best putter within 25 feet but he does set himself up for success at every opportunity by understanding his environment.

The same can be said of many successful business people. They don't always hit the hole-in-ones but they are slow and steady in their rise to success. Still - and this action demonstrates Mr. Speith's true mental acuity - despite his magnificent course management skills, he turned to the experts when he needed that little extra boost.

Though he tied for second at the Masters last year – Jordan did not rest on his laurels. Instead, he asked the experts,  two-time Master's champion, Ben Crenshaw, and “Gentle Ben's” lifelong caddy at Augusta, Carl Jackson – to help him master some of the more esoteric intricacies of the course and look at the result... a green jacket the very next year!

Business owners should recognize the brilliance of this decision and find the expertise they need to turn their modestly successful businesses into a world class one. Nowhere is this advice more valuable than when it comes to a business's most valuable assets – its employees, and nowhere can a business leverage this asset better than utilizing a professional employer organization. (PEO)

PEOs are experts at sourcing, recruiting and then maintaining a superior core of employees for any business. They can handle everything in the realm of human resource management from the routine – payroll and benefits administration – through training and resource allocation, all the way through termination and compliance.

Most importantly, a PEO can leave a business owner and his executive staff free from the mundane – but important! -  everyday tasks of running a business and allow them to focus on the really important goal of growing it.

To find the best PEO for your organization try our free PEO Matching Tool. We feature many PEOs that focus on various industries, sizes and locations to best meet your unique needs.

Employee Orientation in a PEO world

Employee OrientationThe orientation of new employees to their job, position, and environment should assure a smooth transition into the business’s goals and culture. The process invites the employee to fit in and to understand how the fit will benefit employee and employer. You might ask about how employee orientation works in the PEO world.

The results of a study published in Harvard Business Review (2007) suggest that “new employee orientation is a powerful tool that can be used to teach employees about organizational vision and leadership. Employees indicated that they learned a great deal about these topics in orientation training.” However, the same study shows, “what is learned in new employee orientation, did not stay with employees once on the job.” The advantages and disadvantages to employee orientation raise new questions when employees are shared with a professional employer organization.

Who has responsibility for employee orientation?

The professional employer organization is the employer-of-record, so it has a special interest in making sure new hires have all the information they need to succeed. That would include information on:

  • Job description
  • Position in the organization
  • Benefits materials and enrollment process
  • Intra-company communications
  • Safety and risk management practices
  • Company policies and procedures
  • Elements of compensation

While the foregoing fills a big binder with forms and reading that will keep the new hire occupied, you run the risk of its lacking the personal touch. The employer on-site is much better positioned to bring the employee into the corporate culture.

How do you want employees to feel?

In a presentation at the SHRM Conference (2014), Donna Cutting, CSP asked the question, “How do you want your new hires to FEEL before, during, and after the orientation?” You will want new hires to leave any orientation process feeling that you are glad you chose them and glad they chose you to work with.

So, while you can count on the PEO to do its job well because it is so compliance aware, you want to distinguish between two distinct tracks: orientation and onboarding.

  • Orientation is an event where you introduce the new hire to your world. Your world is defined by its vision and culture. Ideas not easily committed to handouts. It is also your opportunity to add depth and context to policies and procedures. It is your chance to put a face on operations and goals.
  • Onboarding is a process that continues well into the employment. Onboarding requires a structured engagement that welcomes, integrates, and prepares hires to success. Where the orientation is information-based, the onboarding is practice-based. For example, depending on your size and structure, you may want to involve new hires in processes outside their assignment, attach the hires to an experienced buddy, invite them to design their own workspace, provide them with all necessary tools, and welcome them with messages, gifts, and a leadership lunch.

In a co-employment relationship, you will want to work on the orientation/onboarding plans with your provider. Since the PEO may be doing the recruiting, it would be wise to place this part of the process ahead of the hiring event. With informative but welcoming materials provided in advance, the orientation simply becomes a next phase.

Allowing the on-site employer to onboard the hires facilitates the business’s ownership of its culture of engagement. Employees will tell you directly or indirectly whether they feel welcome or comfortable with the relationship. Developing an assertive but respectful mutual partnership resolves any problems arising from employee orientation in a PEO world.

Do Your Underperformers Hide in the Shadow of a Lawsuit?

HR LawsuitIt is a simple fact of the modern business world that a lot of managers – mid-level and higher – do not fire obviously underperforming employees for fear of the legal ramifications that may ensue. Bluntly speaking, if you don't, you as a manager are simply not doing your job. In fact, you should realize that you are jeopardizing your own career by allowing this situation to occur in the first place. Here are a few things that you should know to avoid this untenable position:

Employees are “Rules” Lawyers – While most employees don't actually understand the intricacies of the labor laws that regulate their employment, they are readily able to  recognize inconsistencies in a manager's behavior towards his subordinates. For this reason, you and your managers must treat every HR situation – good or bad – in the same manner. While you do not have to be unsympathetic or unemotional while discipling or terminating an employee, it is essential that you always portray an objective stane. In addition, ensure that you have a third party – preferably management – witness any disciplinary event.

Documenting HR Policy is King – When it comes to validating a company's actions, the demonstration of a clear and well-communicated policy is as good as gold in a court. It cannot be stated enough, your organization must, must, must have an  established – and written! – policy for handling any human resource issue. Without this documentation, a judge or arbitrator will typically rule against the company as they should have “known better.” In addition, this documentation about HR policy should be provided to every employee on “day one” and a signed acknowledgment obtained.

It is Essential to Always Document Performance – While most managers roll their eyes when it comes to completing detailed performance appraisals, it is an essential function of their role. Companies are simply too legally exposed if this process is ignored or given short shrift – especially when it comes to the underperformers. The use of an HRIS system, that notifies managers in advance, generates the appropriate forms at the right time, and monitors compliance is an excellent way to manage this process and ensure that it gets done in a timely manner.

Be Ready for the Inevitable – If, as a long-standing manager or company owner, you think that you will never be the subject of an HR lawsuit, you are sadly mistaken. In point of fact, even if you work for a large corporation, the litigant's immediate supervisor – as well as any small company's owner – is almost always named as a defendant. While it is not the end of the world, you should resign yourself to the fact that you will defend at least one HR lawsuit in your life. Having an attorney on retainer who is already familiar with your procedures and documentation can save a lot of time, aggravation, and especially, money.

A Final Thought – Another way to handle the entire human capital issue in your company is to outsource the entire process to a Professional Employer Organization (PEO). These experts are experienced with all facets of human capital administration and the most competent for keeping up with the rapidly changing HR landscape. In addition, they relieve a company's management from the day-to-day administration of HR and allow them to concentrate on running their core business.

To compare PEO companies in your area that specialize in your industry try our free PEO Matching Tool.

Making a Strong Business Case for Hiring a PEO

Business PlanToday’s economy has created an intensely competitive business environment in which hiring and retaining the right employees can make all the difference between success and failure in your business. As the economy continues to gain traction, businesses must meet the demands of evolving technology, talent acquisition, and effective management in order to remain competitive. In such an environment, many smaller businesses may experience difficulties in managing an effective growth strategy while also conducting the day-to-day administrative tasks that keep the business running.

PEOs offer an effective solution to the problem of time and resource management, while also offering an array of benefits to keep businesses operating efficiently. If you are still unsure about whether a PEO can help your company, the following considerations can help you build a strong business case for taking that step.

What Can a PEO Do For You?

Many small businesses don’t have the resources to compete with their larger competitors. A PEO can help level the playing field in terms of benefits and services, enabling you to invest your time and expertise in business growth.

  • Recruiting and Retention—Compensation and benefits play a huge role in a candidate’s decision to work for your company. Excellent benefits can also keep your best employees working for you when they receive other job offers. Many small businesses can’t offer a benefits plan and retirement package that is capable of competing with those of larger companies. A PEO, however, can offer a broader range of benefits at a lower cost than you could offer on your own, giving potential and current employees the financial incentive they need to stick with your company.
  • Cost Benefit—Because PEOs take advantage of the economy of scale in order to provide the best rates for their clients, they can significantly reduce administrative costs per employee. That translates into cost reductions for clients, who benefit both from improved service offerings and lower costs.
  • Services Benefit—PEOs handle time-consuming and technical tasks that pull your attention away from the growth of your business. In addition to payroll and tax administration, a PEO can offer services such as compliance assistance, online job training, and employee performance reviews. They also provide a layer of legal protection in the event of a workers’ comp claim or compliance question.
  • Technology Benefit—Many small businesses struggle to maintain the level of technological sophistication needed to make payroll and other HR functions run efficiently. A PEO makes it possible for small business to take advantage of advanced software applications that they might not otherwise be able to afford. With updated technology, companies can remove much of the friction and frustration associated with managing routine tasks online.

How a PEO Can Facilitate the Growth of Your Business

While the nuts and bolts of business as described above can benefit greatly from the services of a PEO, the most important benefit may be the freedom afforded to business owners when they choose to outsource administrative HR functions. In order to remain competitive, small businesses must focus significant time and energy on developing an effective growth strategy—but how can you do that when your time gets eaten up with payroll, taxes, and compliance issues?

With a PEO handling those functions, business owners can invest their time and energy into growing the business. In fact, according to the PEO Employment Index as reported by the National Association of Professional Employer Organizations, businesses that utilized the services of a PEO experienced consistently higher rates of growth than similar-sized businesses that did not.

Whether you have a small, local business with one location or an expanding business seeking to add additional locations in multiple states, a PEO can give you the support you need to take the next step. Finding the right PEO is a smart choice that will give your business an advantage over your competitors while also enabling you to invest the energy needed to meet your business goals.

Opportunities and Challenges Created by Technology and Social Media in the Workplace

social mediaLast June, at the SHRM2014 conference, I had the pleasure of attending a very enlightening seminar given by Alice Kilborn, JD, on how social media effects an organization and how managers and owners should handle this relatively new business phenomenon. Here are just a few of the key takeaways:

Get Comfortable with the Limitless Workplace
Don't get me wrong. The seminar was not a lecture on the basics of Twitter, Facebook, Pinterest, LinkedIn and the rest but rather a wake-up call to start paying attention to these platforms and the way that everyone's – and I mean everyone's – employees are visiting and using them. Still, the idea that the workplace was theoretically limitless was a bit of a shock and, in the end, I realized that I and my team would have to deal with this reality in an efficient and ongoing manner. One last caveat – I may not have transcribed Ms. Kilborn's points in the exact same order that she did but I do believe that I understood the gist of most of her arguments.

It's a New Tool that must be embraced
Not to overwhelm you with too many numbers but Ms. Kilborn pointed out that in 2013 over 70% of online users over the age of 18 followed Facebook. While it was easily the most popular of the social media sites - the others that I mentioned above were all around 20% - even those numbers were quite impressive and the data indicates that the numbers will only get bigger. The point being that the prudent, 21st century HCM manager must recognize the opportunity and the dangers inherent in social media sites.

Your Company's Online Persona is Defined There – Whether you are Ready or Not
Ms. Kilborn made a very compelling point that the face of your company to the GenXers and the Millennials is now your online social media persona, no matter how much your company has invested in developing a separate personality offline. You just can't argue, or compete, with these numbers. Facebook has over 1.3 billion users worldwide while Twitter and LinkedIn log in with over a quarter of a billion users each. There is simply no disputing the fact that most of your applicants are viewing and investigating your company before they decide to sign on.

Lawyers are Paying Attention Too
It may seem a simple vanity to many people that everything they say and do online will be memorialized in some way or another. To the legal community, this fact represents an amazing opportunity as they can cull and edit everything that your company has said and done online to represent you in the worst possible light. In short, you must assume that every communication on your social media site is common knowledge because that is how the courts treat it. For this single reason, nothing should be posted without due consideration by senior management and the legal department.

A Final Thought
As you can see, there are several important reasons to engage with social media from your company's HCM point of view, however continuous monitoring is necessary to protect the company from any legal ramifications. It is no stretch to say that I did not touch on every matter in the session but I hope that I covered the bulk of the presenter's points. For more information, please visit the SHRM site or see our library of employment articles on PEOcompare.com.

The Employee vs. Contractor Dilemma – Can You Afford to Be Wrong?

employee vs contractorWhile it may seem that converting traditional, full-time employees into contractors is an easy and cost-effective way to avoid the new costs of the PPACA, recent court decisions have made the decision very difficult indeed. In addition, there are some significant differences between an employee and an independent contractor that have tremendous ramifications on the employee-employer relationship.

With these facts in mind, here are some items that the small and mid-sized business owner should consider before retaining any “independent contractors.”

The Legal Lay of the Land

There is no doubt that “contract” employees cost a business less in the short term as they do not consume any benefits and also are less paperwork intensive. Still, large corporations such as Microsoft and CVS/Caremark have learned to their chagrin that they cannot just declare an employee as a “contract” employee.

Instead, the courts have ruled, in several disparate cases, that an employee that looks and acts like a full-time one must be treated as such, regardless of the designation by the company. Failure to act appropriately in these cases can result in severe tax penalties and also leave the company open to lawsuits from the affected employees.

The Internal Revenue Service has some strict guidelines as to what constitutes a contract employee. These guidelines are essentially absolute and can even transcend an agreement between the employer and the employee. In short, be sure that you are treating a contract employee in a manner consistent with the IRS rules.

Contractor Definition

The general rule of thumb as stated by the IRS is that, “an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” In other words, the contractor must be able to control their own hours, schedule and process. If not, they are not considered a contractor no matter how they are compensated.

Limited Control

Concomitant with the IRS definition, an independent contractor does not serve at the pleasure of their client once a contract is signed. Instead, the business client cedes control of the project and must usually wait for designated milestones or total completion before providing additional input. In simpler terms, an independent contractor is paid to complete a task and not to simply report to work.

Competition Generation

In trying to complete a project in the most efficient and cost-effective manner possible, a business owner may reveal pricing, products and procedures that will give the independent contractor an advantage if they choose to compete with your company in the future. Non-compete clauses are far more enforceable against traditional, full-time employees than independent contractors.

Tax Issues

As mentioned above, misclassification of employees – even if done in good faith – by an employer may subject them to costly penalties from the IRS. In addition to paying the full amount of Social Security and Medicare taxes due, the IRS may also require you to pay the employees federal income tax withholding while still crediting the employee with the payment.

Employee Legal Issues

Insurance companies have never been accused of being generous and most of your policies will not cover independent contractors in any way, shape or form. Contractors hurt on the job will instead sue you for their damages. In addition, misclassified workers may sue you for lost benefits and OT not to mention any class action lawsuits if your firm has deep enough pockets.

The PEO Solution

Understanding the subtleties of an independent contractor relationship and the differences between them and other employees is a complicated task even when the legal landscape is not changing on a regular basis. Instead of dedicating in-house resources to the problem, many small and medium sized companies have chosen to use a Professional Employer Organization.

PEOs are experts at dealing with independent contractors and can guide you in avoiding many of the problems detailed above. The simple truth is that a PEO can save you money by streamlining your HR, avoiding issues with the IRS and lawyers and allow you to concentrate on building your business.

4 Critical Reasons to Consider Outsourced Human Resources

outsource HRHuman resources tasks like payroll, benefits administration, tax filing, and legal compliance can eat up huge chunks of time. As your business grows, the time needed to fulfill these responsibilities grows as well. At a time when creative strategy development is critical to the success of the company, HR responsibilities crowd it out. Outsourced HR offers a strategic solution to this universal problem, putting the oversight of business growth back at the top of your list.

Benefits of Outsourced Human Resources

By entrusting your HR operations to a competent PEO, your company benefits in several specific ways:

  1. Time Savings—Outsourced human resources provides relief for time-strapped business owners by removing the minutiae of payroll, taxes, and other HR responsibilities from your to-do list. Outsourcing these tasks frees your calendar for other pressing business matters.
  2. Cost savings—A PEO can negotiate better rates on workers’ compensation, reduce the cost of maintaining an HR department, and evaluate insurance claims for validity. By working more efficiently, a PEO can save you big bucks on most of your HR responsibilities while also eliminating costly mistakes that occur when employers become stretched too thin.
  3. Reduced Legal Liabilities—Employment regulations, labor laws, and other legal questions can create problems when businesses fail to remain up-to-date on the current requirements. Because these laws are subject to frequent changes, it’s easy to miss a compliancy issue that you could be held legally responsible for. One of the responsibilities of the PEO is to remain current on the laws that affect business operation and to make sure your company complies with each regulation. Outsourced HR can significantly reduce your risk of facing a lawsuit.
  4. Greater Efficiency—No one likes to spend time filling out tax forms, filing claims, and running background checks on potential employees. A PEO will handle these tasks for you, increase accuracy, and provide the benefit of the latest technology available to keep your business competitive.

Considering Your Options

A PEO offers full-service human resources solutions. This option will handle everything from payroll to taxes to unemployment claims. Not everyone wants to outsource the entire HR department, however. If you’re looking to retain some control but need help with daily administrative responsibilities, an administrative only services (ASO) package may be the right choice for your company. With this option, you can choose which services are right for your business while remaining the employer of record.

Outsourced human resources appeals to many companies who have found that maintaining an HR department in-house is too big a drain on time and resources. According to The Society for Human Resource Management, the trend toward outsourcing HR responsibilities is growing rapidly. The top three reasons business made the choice were to save money, focus on strategy, and improve compliance. Outsourced services most commonly include 401(k) administration, employee counseling, retirement planning, pension administration, temporary staffing, and background checks. Your PEO will handle all these tasks and more, lifting the burden of taxes, payroll, and administrative duties off your shoulders so you can turn your energies to the success of your business.

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