Outsource for Success - A Small Business Overview

Updated: October 03, 2009

Business development and management consultants agree that, the most successful companies focus time and talent on core issues that are vital to their business. Unfortunately for small and growing firms, business owners often allow important functions such as product development, or sales and marketing to be sidelined by routine administrative and HR functions such as payroll, compensation, employee benefits or mediation.

You may already use a payroll company to outsource many of your payroll functions. Today, there are companies who provide comprehensive HR outsourcing services which allow business owners and managers to focus their attention on running their company.

Professional Employer Organizations

Professional Employer Organizations or (PEOs) have revolutionized the delivery of employee management and human resource services to small and mid-sized companies across America. PEO's relieve employers of the time-consuming chores of managing employee administration and payroll, and ensuring that their firm is in compliance with the myriad of government and HR regulations.

Co-Employer Agreement

Under the terms of a co-employer agreement, the PEO acts as the employer of record, providing accounting, administration, benefits, HR and OSHA compliance, payroll, and risk management services for thousands of companies and millions of employees on a daily basis. This pooling of resources enables the Professional Employee Organization to command significant purchasing power when negotiating rates with insurance companies for health, dental, liability and workers compensation coverage.

Everyone Benefits

Every employee and family member can enjoy affordable, high caliber "Fortune 500" benefits choices that only large companies and government agencies can offer. Managers and staff gain access to professionals with expertise in employee benefits, human resource and risk avoidance and control.

Measuring Success

The value that Professional Employer Organizations provide small and midsize firms can be difficult to measure, but is impossible to ignore. They help a young firm succeed against more established competitors in the market for skilled and competent workers. PEO's can improve your recruitment success, assisting you in attracting candidates whose abilities, skills, and references have been verified, while enhancing your ability to retain and reward valuable staff, managers, and officers.

Finding a PEO

The National Association of Professional Employer Organizations (NAPEO), the industry trade group, estimates that approximately 700 PEOs are currently operating nationwide. The problem for most business owners is that each PEO offers a different level and scope of administrative services, employee benefit programs, HR platforms and support. How do you compare each one's value, quality, and cost?

Devoting the time, energy and expertise to accurately compare PEOs can be a daunting task for any employer. Internet directories such as PEO.com and peo-quote.com can help with your search, or you can seek out the services of consulting firms who specialize in the field of HR Outsourcing and the Professional Employer Organization industry.

Bruce Silver

Employers Rx LLC


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