Running a small business can prevent a few issues stemming from staff management, as developing an infrastructure and determining employee benefits can prove challenging. Insert PEOs, or Professional Employer Organizations, which partner with companies to aid human resources, employee benefits, regulatory compliance, and payroll outsourcing. While that all sounds positive, moving forward with a PEO has notable risk when compared to HR outsourcing.
While PEOs take a similar burden away from employers, contractually sharing responsibilities with the company, they can force a sacrifice of control, if managed poorly. While HR outsourcing allows an employer to relieve responsibility without surrendering supervision, PEOs can pose a threat as leaders lose sight of strategy and operations. In addition, it is crucial that companies know who is providing their PEO before committing. For instance, payroll companies are seeing the apparent opportunity with PEOs; as a result, they have begun building their own. Now, when these services are offered, companies aren’t told the full story.
Although PEOs provide the benefits stated above, there are considerable losses that an employer may experience after making the commitment. First, payroll companies often have limited experience with benefits and in HR. This issue is obvious, as the PEOs will be providing insufficient service. However, the most detrimental piece of payroll PEOs are that they fail to offer customized solutions to internal issues. Your company is a living, breathing entity that is uniquely its own. Most PEOs will find this complicating, and will fail to give the necessary response, leading to deeper, long-lasting problems that could put your company at risk.
HR outsourcing is a tested, reliable option that will produce similar results, with less risk. So, while millions of small businesses join the movement and jump aboard the PEO train, make an educated decision and stay away. Luckily, FosterThomas will place your business first, acknowledging the individuality of each company and developing HR initiatives that align with your organizations mission. We offer varying levels of HR support, allowing you to tailor your outsourcing to the needs of your organization and keeping your business competitive, dynamic, and modern.
Don’t let PEOs hold your business down. If you are in need of responsibility relief, contact the most reliable source of aid and see what FosterThomas Professional Services can do for you by calling 800-372-3626 today.