HR Outsourcing

HR Outsourcing

PEOs Tap into Additional HR Benefits

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Human resource management involves a lot more than paying employees on time and tracking vacation days. But lack of time often means this Pandora's box of compliance regulations and benefits-related issues gets ignored until a crisis; disgruntled employees, a workplace injury, or a government fine arises.

HR Outsourcing

Using a professional employer organization (PEO) can be one way to address these issues and save you money at the same time. The cost of a PEO will be determined by:

Be a member of a larger pool

Big box retail stores are able to offer the same goods and services as a traditional retailer but at significant savings because they purchase huge amounts of an item. By buying in bulk the cost per item goes down and so does the cost to the customer. By working via a PEO, a small business owner can take advantage of bulk buying by the larger entity. Not only will the employer save money on certain benefits but he is able to offer the employees benefits that are associated with large corporations.

Working with a PEO does not free your company from all HR-related liabilities.

As an off-site employer, an employee leasing firm cannot legally assume all the liabilities related to employees -- even if a contract states it. Since your business directs the work activity of the employees, your company can still be on the hook for any legal action.

But many companies find that offering such big company benefits is necessary to be competitive when recruiting.

It's important to thoroughly investigate a PEO before signing up. Beyond the cost, which can range from 2% to 6% of payroll, you'll want to make sure they are financially stable and offer the level of service you want.

Companies should be able to provide proof that they pay their providers and that they can comfortably handle your payroll. Also, get details on the providers. Find out from current clients about their satisfaction with the service. Also, it's worth asking how often they switch service providers.

Finally, if full service is what you want, make sure the expertise is there. Look for a firm that's familiar with the issues related to your industry. The PEO should be able to supply you with resumes of their HR experts and tell you how easy it is to reach them.

Oddly enough, one way to keep your employees happy may be to fire them and have them work for an employee leasing firm.

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