PEO only if you want - Alpha Blog

On TechRepublic: 10 ways users mess up their computers

Get more done with Windows Mobile

Alpha authors

Alpha Blog: CNET's gadget & tech news and opinions blogged by our editors

January 05, 2006, 7:54 AM PST

PEO only if you want
Posted by: Dorian Benkoil

A lot of what we talk about in this space is how a small business can pay someone to do things that aren't part of the core business so that it can concentrate on what is core.

We'll soon be posting Best Practice stories on handling human resources and payroll through online vendors such as PayCycle or SurePayroll, which can be excellent, cost-effective solutions for managing benefits, sick days, vacation, and the like for as few as 5 employees or as many as 50. Another solution is something called a Professional Employer Organization. PEOs say they'll help you recruit, hire, do background checks, handle some HR functions such as benefits and legal compliance, and even assume some of the liabilities. They also can get you better rates on benefits and worker's comp because they aggregate a bunch of businesses and buy in bulk.

There are a few challenges, though, so you'll want to be careful before you use one. First, it's hard to know who's good. There are hundreds of PEOs in the United States, and while there are professional organizations that set standards, you'll probably want to check up on ones you're considering and ask some hard questions, as well as get references. Second, as with much outsourcing, you're giving up control and the chance to learn and develop expertise; while you're not an expert in human resources, by handling some of the functions, even with an online vendor, you'll develop some expertise that could help inform your business and assist in hiring later. And while PEOs can save you time and keep you focused, they may not really save you money: generally, they charge a percentage of your payroll, as much as 3 percent (as noted lower down in this story).

Read also: Work
Email to a friend | Print this post

TalkBack
6 messages

Post a comment

Work with a broker

Dorian's blog from Jan 2006 is a bit misleading. He does make some very good points though. While I highly recommend working with a PEO, locating the right one for you business is a difficult and confusing process.

If you are speaking with a handful of providers they will tell you exactly what you want to hear and offer you pricing that does not match up apples to apples with the competition.

The best way to locate a PEO for you company is to work with a broker. My company for example represents over 250 PEO's nationwide. The reason for this is that each company requires different levels of service, support, benefits and handholding. Depending on your location,size,industry, services required and benfits desired a broker can pinpoint you directly to the best PEO for your situation rather the PEO trying to make you fit in their little box.

Dorian also says that pricing is based on a percentage of payroll. Actually the admin fee is first calculated based on needs, a dollar is then attached on a per employee per year base. Some PEO's will simply tell you what they are going to charge on a per employee per year basis while others simply take that number divide it by you total payroll and come to a percentage of gross pay.

Again by working with a broker a business own has an experienced professional consultant on their side to guide them through the entire process including getting the price as low as possible.

For more information on selecting a PEO visit www.hroplus.com

by www.hroplus.com (See profile) - November 22, 2007 8:50 PM PST

PEOs and Health Insurance

In addition to helping you with your administrative headaches, most PEOs offer health insurance. In addition to increased buying power, a PEO can offer you protection from rate increases that occur as a result of even one employee's illness or condition. These rate increases can last up to three years. However, if your liability is spread among a larger pool of employees, the rate increases are barely felt by the PEO client.

by jmcdermott (See profile) - June 19, 2007 1:05 PM PDT

PEO to reduce HR costs

Researching ways to reduce Workers Comp cost and provide affordable health insurance benefits, I looked into PEOs. By outsourcing human resources for your current employees,business owners can reduce employee overhead and administrative paperwork. Professional Employee Organizations removes the non-productive tasks from your business so that you can concentrate on growing your business. It�s like having your own personal staff of human resource experts to handle all of your employee hassles. I researched numerous PEO websites at http://www.onlinehrhelp.com. Good luck on your search!

by HRHelp (See profile) - May 9, 2007 10:01 AM PDT

PEO and Employee Leasing options

Very insightful information about using an employee leasing company. You are right that employee leasing can make a business more efficient, legally compliant and also offer betters access to employee benefits packages. A Professional Employer Organization � PEO can offer HR outsourcing solutions delivering payroll, insurance and HR expertise to businesses ranging in size from 5 � 1000 employees. PEOs deliver a full suite of services including payroll, regulatory compliance, work comp insurance, human resources support, health insurance and retirement plans for small and medium sized companies. Of course it always make sense to shop around. A complete review of all the PEO companies see www.staffmarket.com.

by PEO advisor (See profile) - November 27, 2006 7:53 AM PST

Employee Leasing and PEO Payroll Services

P.M.L and its members have been serving the needs of small and medium-sized businesses in the human resource field since 1985.

By outsourcing human resources for your current employees, business owners can reduce employee overhead and administrative paperwork. Our service removes the non-productive tasks from your business so that you can concentrate on growing your business. It's like having your own personal staff of human resource experts to handle all of your employee hassles.

You can visit PML Woldwide at http://www.planmarc.com or call 800-567-0235.

by PeoBigWig (See profile) - January 13, 2006 7:42 AM PST

PEO

If you go to a Dentist who cleans your teath? The Dr. outsources it to a Dental Technician who specializes in cleaning so he can focus his/her time on what makes them money.

PEO works the same way; what is best use of your time!