If your business is changing and you are deciding between growing an in-house HR team, utilizing a PEO, or blending in-house tasks with select service providers, this blog is for you.
To PEO or not PEO – that is the question we’ll guide you through today!
First, what is a Professional Employer Organization (PEO)?
A Professional Employer Organization (PEO) is a company that provides human resources services. They can manage tasks such as payroll, healthcare and employee benefits, tax compliance, employee onboarding and offboarding, oversee workers compensation, verify workers’ employment, drug testing, and more.
The time might be right to utilize a PEO if your company is growing and adding team members and/or if your exposure to risk is increasing and you don’t have a team to handle it all.
One of the biggest draws of a PEO is risk management. According to Business News Daily, “…many PEO agreements have built-in risk management features that flag and fix potential issues ahead of time, warding off problems before they begin.” This can provide peace of mind to the business owners using PEOs. Another benefit is that your small- to medium-sized business can provide “large company-style benefits” to attract talent, shares CBIZ.
Are there any drawbacks to utilizing a PEO service?
When you hire a PEO, you enter a co-employment agreement. According to NAPEO, “In a co-employment agreement, a PEO client’s employees (also called worksite employees) are employed by two separate entities, the client company and the PEO.” The client company (you) generally maintains business and operations decisions while the PEO focuses on employment-related matters.
It’s important to note, however, that you’re still on the hook. “Yet, even when outsourcing HR to a PEO, the employer still bears ultimate responsibility if a libelous issue arises with an employee,” says CBIZ.
Other potential challenges in hiring a PEO may include limited customization, changing costs, less access to data, not getting to hand-pick vendors, and infrequent communication since PEOs have multiple clients.
Is a PEO right for my business?
Now that you know some of the pros and cons of working with a PEO, you may be wondering what the best option is for your business.
The answer is: it depends. Let us explain…
Here at Fusco Orsini & Associates and 4C Advising, we partner with our clients to make the best, most objective recommendation possible. Sometimes that means referring you to a PEO and other times that means unbundling your PEO services and moving tasks in-house and/or to other service providers.
How can I leave my PEO?
If leaving your PEO is the best option, please know that it is possible to unbundle your PEO services. Reasons you may want to do this include a desire for more customization, choice, communication, and access.
The process of unbundling requires some effort, but rest assured, we are prepared to step in to help! In fact, partnering with Fusco Orsini & Associates to unbundle your PEO is easier than ever. We make the process of unbundling as seamless as possible. How? We work directly with several quality vendors to obtain the services that a PEO typically provides. Because we have access to several vendors, you benefit by:
- Choosing from a variety of vendors based on your specific needs
- With us, you’re not locked into any one vendor or option. If a solution doesn’t fit your needs, you can move that piece to a different vendor. It’s all about giving you flexibility.
- Retaining your workers
GET STARTED HERE.
What are the types of PEO services Fusco Orsini & Associates can help you with?
- Human Resources
- Payroll Administration
- Administration of Employee Benefits (handled in-house by our team)
- Risk Management (handled in-house by our team)
Are you ready to clarify the best solution for your business (PEO or no PEO)? Get started HERE in under 3 minutes, and then a member of our five-star rated team will reach out promptly.
We are excited to partner with you every step of the way as you transform the way you do business!
P.S. – In the meantime, download our free guide “How to Unbundle PEO Services” HERE.
References:
Business News Daily, PEOs and Risk Management
Small Business.Chron, Human Resource Policies & Organizational Cultures
CBIZ, The Pros and Cons of a PEO
