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Toni Klym McLellan

Guide to Professional Employer Organizations (PEOs)

Outsourcing HR is becoming popular for small business

By Toni Klym McLellan, Freelance Writer & Editor, Toni Writes

Hiring and managing employees is one of the most burdensome tasks a small business faces. You have too many other things to do besides worry about recruiting workers, offering benefits, managing payroll and an arsenal of payroll tax issues, as well as workers’ compensation and other items.

Professional Employer Organizations (PEOs) offer a solution to this problem. Delegating core HR tasks can save time, resources, and headaches – allowing you concentrate on core business endeavors.

The benefits of hiring a PEO include:

  1. Built in expertise – PEOs know the legal and logistical requirements pertaining to their services so you don’t have to wander the mazes of employment regulations and bookkeeping know-how.
  2. Bundled HR assistance – most firms provide multiple human resource needs, saving companies from having to do payroll, background checks, and benefits management in-house.
  3. Lifting the burden of potential litigation – many PEOs also offer risk assessment and liability protection.

Action Steps
The best contacts and resources to help you get it done


Determine your human resources needs

If your company has employees, chances are it could benefit from a PEO. They saves time wading through employment regulations or performing background checks and let you get down to business.
I recommend: Take Administaff's Company Profile Test for a free evaluation of your HR needs. Staffmarket.com offers a PEO comparison sheet for selecting a PEO based on services needed.

Shop around

With hundreds of PEOs to choose from, finding the best one for your company can be daunting. Professional organizations and private vendors both offer listings of member PEOs, some by sending several free quotes from local PEOs.
I recommend: Check out c|net's Alpha blog for an overview of how to choose the right PEO. Get free quotes from up to five PEOs in your area from BuyerZone.com or check StaffMarket.com's extensive listing of PEOs (check out their buyer's guide while you're there). The NAPEO web site also features a searchable database of member PEOs.

Ensure a seamless fit with your business

When you've narrowed your choices, be prepared to ask detailed questions. What kind of written agreement governs your relationship? What if you're not satisfied with services offered? What certification and/or licensing does the PEO carry? What assurances regarding employee litigation can the PEO offer?
I recommend: Track industry trends by reading the National Association of Professional Employer Organizations' PEO Insider and BuyerZone.com's PEO Buyer's Guide, which offers information on the nature of the PEO co-employer agreement.

Tips & Tactics
Helpful advice for making the most of this Guide

  • Remember that you may not necessarily save money using a PEO, but you will save time managing myriad HR issues.
  • Check to see whether your PEO is licensed by your state.
  • Have an attorney review the service agreement between your company and the PEO.
  • Reassure your staff that their jobs are not in jeopardy due to outsourcing; the PEO is there to manage human resources issues.
  • Ask what services are offered as a package or “a la carte.”

The official source of Professional Employer Organizations (PEOs) is
the PEO Companies page at Business.com

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Related Resources

Recommended Solution Providers

StaffMarket.com
PEO network that matches your company up with a professional employer organization in your area.

BuyerZone: PEO and Employee Leasing
Quoting service for finding professional employer organizations.

Administaff.com
Provide HR outsourcing strategies to companies with 10 to 2,000 employees for increased growth and productivity.

PEO.com
National directory of PEO providers.

NetPEO.com
Assists small, and medium-sized businesses with their PEO, employee leasing and HR outsourcing needs.

Paychex Business Solutions
Cost-effective alternative to delivering comprehensive benefits with minimum commitment of your time and manpower.

Best Sites to Learn More

National Association of Professional Employer Organizations
Trade association representing more than 325 professional employer organizations nationwide.

PEO7
Information on the PEO industry, offering articles and other resources.

BuyerZone: PEO Buyer's Guide
Information and resources for employee leasing.

Beginner's Guide: PEO
Articles covering aspects of PEO and employee leasing.

Best Blogs and Forums

Ind.Peo.com
Forum for the PEO industry.



FEATURED LISTINGS
Free Price Quotes for Human Resources Outsourcing
Easily Compare Prices & Save. Visit Now to Find the Best Deal!
HumanResources.BuyerZone.com
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Our mission is to provide expertise from HR professionals allowing you to reallocate internal resources and focus on your core business initiatives.
www.hrxcel.com
Compare Price Quotes for HR Outsourcing: AllOptions.com
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www.alloptions.com
Human Resources Outsourcing Resources
Find Human Resources Outsourcing resources. Search listings and reviews of retailers, specialists and services in your local area now.
JustClickLocal.com
Sage Abra HRIS Software
Manage All Employee Info With Sage Abra HRIS Software. View Demo Today.
www.SageAbra.com
Human Resources Information System
Human resources information systems from TimeForce enable you to track salaries, demographics, previous positions, performance history, and skills.
www.MyTimeForce.com

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