The Four P's of HRO and PEO Evaluation

Updated: September 27, 2009

All too often companies spend hours analyzing, assessing, and comparing the cost or savings that one HRO (Human Resource Outsourcing) or PEO (Professional Employer Organization) service provider offers versus another. While a detailed spreadsheet of costs may help to determine "hard dollar" expenditures, it very rarely accounts for the intrinsic value of the competing service models which is what HR directors and management is trying to compare.

When working with executives and consultants, very often items such as the co-pays of a health plan, workers compensation rates and administrative fees take precedence over far more important questions. Are you teaming up with an outsourcing partner who is flexible enough to meet your demands? Will you have to conform to "their" way, and if so, when and how often? Is their expertise, services and strengths complimentary or duplicative? Is your corporate philosophy compatible? Only by completing a thorough investigation can busy executives be assured of making the "right" choice.

Focusing in on these 4 P's will help to guide you through the process.

People - Meet with the management and team you will be working with in person, by phone or teleconference. What are their backgrounds, functions, qualifications, and responsibilities? What are the scopes of services each will deliver, how, and how often?

Process - What is the plan for a smooth transition? Map steps for employee notification, orientation, and enrollment. Identify all of the who's, what, where, and when of plan implementation. Establish clearly defined goals, time-lines, reviews and evaluations.

Platform - Human Resource Information System (HRIS) provide a robust set of tools for employee administration, benefits, compliance, payroll, and risk management. Identify levels of employee and management access, orientation, and training. How will you coordinate IT staff for system integration with automated attendance and Point Of Sale systems, 3rd party software and hardware?

Programs - Employee Benefit programs provide a competitive edge in attracting and retaining a highly motivated and productive workforce. Evaluate the quality, value, and choices of health, life, dental, disability and retirement plans. What employee communication, mediation, recognition, rewards, and relocation services are available?

Bruce Silver is the founder and managing member of Employers Rx LLC, an employee management consulting firm that specializes in the HRO and PEO industry. A nationwide consulting firm, whose focus is helping businesses compare, select, and form successful HR Outsourcing or Professional Employer Organization relationships. We assist firms and SME's with 5 to 500 employees to become more profitable by outsourcing their non-productive employee management functions, saving busy executives and business owners both time and money.

Additional information is available at

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