Buyers Guide for PEO - Professional Employer Organization Services
Since 1999 StaffMarket has assisted thousands of companies with as many as 10,000 employees and as few as one. In 2004, the average PEO client size StaffMarket assisted was 26 employees. PEO clients range through all industries from roofing to medical practices. In general, most small companies enjoy competitive work comp pricing and the convenience of a single bill that covers all of their employer related liabilities. Mid-sized companies also appreciate the work comp pricing and the HR services. Many times they have had no formal HR person or department. Larger companies are usually seeking access to supplemental HR expertise or competitive health insurance. In addition many larger companies are seeking a way to avoid major capital investments in HR systems (HRIS). Outsourcing their HR to a PEO allows them access to “state of the art” computing systems without investing in an IT staff or expensive software.
No. A common misperception of the PEO relationship is that the client will lose control of the company. Rest assured; no PEO wants to run your company! (They would probably just mess it up anyway!) In a PEO relationship you will contractually separate the administrative duties, responsibilities and liabilities. For regulatory purposes the PEO is the administrative employer and the client company is the workplace employer. Remember, you are the PEO’s customer and you can terminate the relationship (commonly on 30 days notice) at any time. However the co-employment relationship is also a partnership. If your PEO advises you on certain HR practices and you ignore their advice, then they may also end the agreement.
Engaging a PEO will not change the day to day work-life of your employees. Most employees are excited to have a robust suite of employee benefits. All PEOs will assist you with explaining the changes and additional services offerings available from the PEO.