PEO – Human Resource Management Services

Managing human resources is one of the most complicated and large-scale responsibilities businesses have to manage. Yet it is one of those responsibilities that don’t directly contribute to the earnings of the business. Being as resource intensive as it is, businesses would be wise to outsource human resource management to a PEO (Professional Employer Organization).

Human Resource management is a selection of complicated tasks involving employee related matters such as employee relations, health benefits, workers’ compensation claims, payroll, payroll tax compliance, unemployment insurance claims, and much more. A PEO would take over these responsibilities. Not only would the PEO enable employers to concentrate on their core responsibilities, but also offer businesses valuable expertise. The customer company can therefore fully shift focus to the revenue-producing side of its own operations. Human resource management services provided by a PEO typically comprise:

  • Payroll and tax administration
  • Employee benefits administration
  • Workers’ compensation administration
  • Risk management
  • Regulatory and government compliance
  • Recruitment and selection
  • Employer liability Administration
  • Immigration compliance

One of the reasons for the efficacy of PEO human resource management solutions is the nature of this PEO’s relationship with the customer company. A professional employer organization generally enters into a co-employment relationship with the client company, whereby it assumes the client company’s responsibilities, leaving the company to concentrate on its core activities. Little and medium-sized businesses can feel the benefits of hiring a PEO longer, since they are those usually struggling with setting apart their resources for maintaining a HR department. See: PEO Canada: Outsourcing in HR & Outsource Employer Services

HR Best Practices:

Finding the right people:

Many Professional Employer Organizations supply services that help with worker recruiting. They assist draft professional job descriptions, provide salary tools to find the ideal level of compensation, supply discounts for job postings online, some PEOs will even help screen the inquiries you get from ads.

PEO Canada also offers interview training for management, will help administer background & reference checks in addition to drug screens. When it is time to hire, PEOs provide a professional worker enrollment kit which rivals that of a Fortune-500 business. This is an excellent value for workers spread across multiple states.

Getting the most of the people:

Professional Employer Organizations provide services to aid their customers to inspire their people such as employee performance reviews which can be incorporated into policies such as employee milestones, promotions, and bonuses. They also provide various training seminars for managers to learn about employee motivation, communicating with workers, supervising, coaching, etc..

Maintaining your people:

Many studies find that the most important factor concerning general employee satisfaction with their jobs is the quality of the benefits program. So although HR best practices and staying in compliance will help keep your employees satisfied, there is no doubt that the benefit packages offered by PEOs will be the most powerful facet in retaining employees. In addition to medical plans, most PEOs offer dental, vision, disability, and life insurance plans as well as fine add-ons like worker support programs, and discount buyer clubs.

For businesses that are highly competitive in the worker recruitment arena, especially those in which the competition is comprised of enormous corporations, a PEO is a great way for a small business to even the playing field.

HR Compliance:

This is actually the area of human resource providers that many PEO clients utilize often and for a very good reason. PEOs will help keep their customers in accordance with employment regulations like ADA, EEOC, FMLA, HIPPA, and ERISA, to name a few.

To kick off a connection many PEOs offer an extremely valuable service called an HR audit, and it is a proactive measure whereby they will review current policies to identify and resolve HR compliance issues before problems arise. They will also review/create employee handbooks, and many PEOs provide a variety of training for workers to learn about discrimination and harassment in the workplace.

Employee relations is an essential component of HR compliance, so many PEO clients attest that if they are having an issue with an employee, they first consult with their PEO before taking actions or paying for a lawyer. This saves clients thousands on fees and can stop much worse, an employment litigation lawsuit, which will be on the upswing.

What happens if you do get sued by an employee? Many PEOs offer EPLI Insurance, which stands for Employment Practices Liability Insurance, with coverage ranging anywhere between $1M – $2M. This coverage will cover any legal expenses or settlements that arise from an employee lawsuit.

EPLI insurance is usually expensive for a small business however for PEO clients it generally comes as part of their bundle. Beware, there’s usually a $10k-$25k allowance if this insurance needs to kick in!

Coemployment Factor:

Coemployment, in this case, has the much more related to HR Compliance than HR Best Practices. Bear in mind, that the Professional Employer Organization is your employer of record for all of their clients’ employees. It follows that HR Compliance isn’t just a service PEOs offer, it’s in their own best interest to maintain compliance because any issue that appears from non-compliance using a law, late payments, workers comp claims, etc. firmly on their shoulders.

The drawback of employment here is that PEOs usually have thousands of workers, which means they must comply with a variety of regulations that only apply to large businesses. By way of instance, FMLA only applies to companies with 50 or more employees. Because the PEO must remain in compliance with FMLA, their work-site workers (all of the clients’ workers ) have rights to the provisions put forth in FMLA, and this also means the worksite company (your business) must adopt this.

This simple fact is frequently left from the sales process, and for many companies, it is a serious concern. However many businesses discover that by subsequent regulations aimed at protecting workers, it creates an atmosphere in which employees feel more comfortable with their workplace. The security big corporations provide to employees is now found in your business, if worker retention is a business goal, you are in a fantastic location.