If you talk to a small business owner about why they might retain the services of a Professional Employer Organization (PEO), they’ll probably trot out some line about being able to assuage themselves of all things human resources related so that they can focus on other aspects of their business. Now ask an HR professional how they could benefit from a PEO and the answer might be a little less obvious. After all, isn’t a PEO an off-site HR pro?
There’s no denying that there is a great deal of overlap between the two, but can an in-house human resources person do everything a PEO can do? Can a PEO do everything the in-house HR person does? Well, maybe, sometimes, but would it be done in an effective, time-efficient manner that constitutes a good use of company resources? You see, when you engage a PEO, what you’re actually doing is creating an HR powerhouse that works smarter, not harder.
Below are just a few examples of how a PEO can transform some big-ticket HR tasks, that is, the parts of your job that go beyond the process of providing day-to-day HR support, but yet still need to be performed, updated, or otherwise reviewed on a regular, time consuming, basis.
Employee Management System
Standard HR:
Your current employee management system consists of paper files in a beaten-up file cabinet in the storage closet. You know you need something a little higher tech, but launching an employee information system could take even a seasoned HR pro years to get off the ground.
With a PEO:
By contracting with a PEO, you can get access to a superior information management system you can implement in mere hours. And it doesn’t just stop with the actual system: you now have access to a team of system experts who can coach you through running analytics, no matter how big or small.
Enrollment Season
Standard HR:
Open enrollment season comes but once a year, but when it does, boy is it a doozy! You do your research, submit to round after round of negotiations, and finally setting on a vendor that offers you some decent benefits at what they tell you is the best price.
With a PEO:
With a PEO, we do all the legwork, so you only have to browse the list of pre-approved insurance offerings that check all of your boxes—and then some. Further, because a PEO can use its pooled client base to obtain the kinds of prices that a previous vendor said would be impossible for a small business to procure. A PEO can also help ensure that all employees have coverage to eliminate fines for your business and them.
Compliance with Ever-Changing Laws
Standard HR:
You hear the word that a new law is coming down the pike that might significantly change the way that you do business. You’ll need to alert your workers, update your system, revise your employee handbook, host a few trainings, and set up a system for reporting and compliance. You aren’t sure what direction this law is going to go in, but it’s already looming large and you’re panic-stricken about how you’re going to make all these changes when it goes into effect.
With a PEO:
A PEO has dedicated staff that stays apprised of labor laws at the federal, state, local and even industry level. They will be the first to let you know when a change in the law is going to be implemented and what it’s going to mean for your business. The best part? The PEO will make all those necessary amendments for you. We’ll update your employee information system to reflect the new law, make the changes to your employee handbook, develop and organize training to discuss the change, and do the necessary checks to make sure you’re in compliance.
Managing Risk
Standard HR:
You’ve just got wind that a disgruntled employee plans to sue for wrongful termination. You barely remember the circumstances around this workers departure and you can’t seem to find any documentation on his performance or really anything on his time with the company at all. He’s slammed your boss and the company on social media and says he’s retained a pretty big wig lawyer. You start the search for a big wig lawyer of your own to manage the risk and do damage control.
With a PEO:
With just a few keystrokes, a PEO can access the employee information system where it can pull up all kinds of data on that employee, including all past job performance reviews, disciplinary actions and any other information surrounding his dismissal. We’ll also review your employee manual to the pages we helped you develop about your company’s social media policy and the consequences for infringing upon them. You can also stop searching for a lawyer – a PEO has a few heavy hitters of their own and will share them with you.
In short, a PEO takes some of the heavy lifting out of HR. It takes over those huge, time consuming or stressful projects so that you can focus on the activities that are most important to you and your company – the ones that you want to keep in-house and under your control.
Have additional questions about what a PEO can offer an HR professional like yourself? Download our resource guide for more information.
