If you are familiar with different HR trends in the marketplace, you may have come across a Professional Employer Organization, or PEO. If your company hasn’t worked with one in the past, or you are not an employee whose company worked with a PEO, chances are you really don’t know what they are, or what they do.
What is a PEO?
Simply put, a PEO is a niche industry in the broader Human Resources Outsourcing field, and creates a “co-employment” relationship with its clients to provide HR consulting support, employee benefits, workers’ compensation insurance and payroll/tax services.
From the NAPEO (the PEO’s National Association) Website:
Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.
Businesses today need help managing increasingly complex employee related matters such as health benefits, workers’ compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. They contract with a PEO to assume these responsibilities and provide expertise in human resources management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations.
A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client’s worksite and by contractually assuming certain employer rights, responsibilities, and risk.
Businesses across America have discovered the incredible value of PEOs because they provide:
- Relief from the burden of employment administration.
- A wide range of personnel management solutions through a team of professionals.
- Improved employment practices, compliance and risk management to reduce liabilities.
- Access to a comprehensive employee benefits package, allowing clients to be competitive in the labor market.
- Assistance to improve productivity and profitability.
Contact CPEhr if you think a PEO may be a good fit for your organization.