Human Resources Outsourcing - Professional Employer Organization (PEO) or HR Outsourcing Provider?

Running a business is a full time job and you need to spend your time ensuring the business runs smoothly. During the payroll and HR related tasks begin to distract you from focusing your organization's main activity may be time to outsource some or all HR related activities. In these cases it makes sense to contact a company that manages HR administration as their main activity.

Depending on your needs, you may consider is a Human Resources Outsourcing (HRO) provider or professional employer organization (PEO).

You should first consider how much of your HR function you want to outsource. Working with a HRO allows you to outsource HR functions specifications. A PEO on the other hand "bundle" of services, such as workers' comp, wages and benefits, and generally can not offer them as stand-alone options.

Whether you hire a PEO and a HRO, you still need an in-house HR director or manager to work with the supplier. However, the supplier can handle a variety of activities of the staff may not have time to do it. They can also provide expertise in areas the staff did not know, such as making sure that your company is in compliance with the latest labor laws, the tax benefits and payroll reporting.

Neither PEO and HRO provider will manage your employees. Rather, both will work with you and your HR staff to manage some or all HR functions, including payroll, benefits administration, compliance, training and more. Think about how to increase both the human resources personnel, not replacing it.

For small businesses a PEO can help control the cost of human resources as the Insurance Workers' Compensation, health benefits of the Group and payroll processing. In order to provide these and other HR services of PEO becomes a co-employer of the workforce of your organization.

In most cases, the PEO is considered the employer of record, even if the client controls the day to day activities of the workplace. While it retains authority over employees in the workplace, the PEO is responsible for performance management, remitting payroll taxes, processing claims for workers' compensation and process documents.

So, why would you want to let someone else deal with your co-workers?

Prices and efficiency. A PEO pool the purchasing power of many companies like yours, that offers the price advantage we can pass on to its customers. Through these economies of scale, the PEO can often get a workers' compensation insurance and group health benefits (which are provided to employees) at prices much lower than your company may be able to get over it located. Working with a PEO can also buffer the employer's sudden interest rate increases in health premiums or workers' compensation.

Moreover, since the PEO specializing in employment-related activities is literally in the field of employment. PEOS processes and files All administration and payroll taxes, the processes of worker's comp claims, and administers employee benefits. This reduces the amount of work the employer has to do, but also expands the benefits and services to employees. In addition, working with a PEO can eliminate paperwork and unexpected costs. For example, if payroll taxes are controlled by a workers' compensation carrier is the PEO, which is controlled, not your company.

Again, PEOS are not a substitute for the human resources department, but integrate the HR staff so they can focus on areas that traditional HR recruitment, hiring and training. Do not have time for both the traditional functions? No problem - most PEOS also offer the ability to manage recruitment, background checks and much more. A PEO can provide complete support for all HR functions, allowing the company to focus on why you went into business in the first place (probably not for payroll taxes and the administration of benefits).

So, you should use a provider or HRO PEO?

The first factor to consider when choosing between two options is the size and scope of your company's needs. Many jobs HROS with large companies because of their size can achieve more competitive prices on the benefits and risk management solutions and also have a large in-house HR department. For these companies, they save more money outsourcing specific areas of HR such as benefits administration, application management, HR information systems.

Many smaller companies, on the other (less than 500 employees) benefit from bundling their services with a PEO. The benefits of price and efficiency offered by a PEO to outsourcing HR-related administration a key component of their business planning. In both cases, the comparison of suppliers and proposals HRO PEO is critical. Websites like EmployHR.com provide businesses with free multiple quotes from HRO and PEO providers. You might also want to spend some 'time to research human resources outsourcing options at the Society for Human Resource Management (SHRM) website, shrm.org

In summary, the decision to outsource HR is very important. First understand the difference between HROS PEOS and can help you make the right choice. If you plan to outsource only certain functions, an HRO is the best solution. If you're looking for a full-service solution, a PEO may be a better solution .......