The PEO Value Proposition
As Published in the March 20, 2006, Issue of BusinessWeek Magazine
Become an Employer of Choice
It may be cliché, but a company’s most valuable asset is truly its employees. Small and medium-sized business owners and managers recognize that they must offer a solid benefits plan and employ sound Human Resources (HR) practices if they want to recruit and retain the best and the brightest in today’s competitive labor market. Often times, however, they do not have the time, expertise or resources to adequately manage this process. Partnering with a Professional Employer Organization (PEO) can help with these issues. Most large PEOs provide a broad range of products and services including comprehensive healthcare benefits, payroll services, workers’ compensation and risk management services, staffing services, as well as HR services provided by a team of certified HR professionals. Offerings can include access to comprehensive medical plans, Flexible Spending Accounts (FSA), Health Savings Accounts (HSA), and 401(k) plans, to name a few.
Additionally, businesses may realize a reduction in overall human resources-related costs due to economies of scale and the enhanced expertise of the PEO. This is how it works: PEOs share employment relationship responsibilities with their clients and act as the administrative employer by providing HR products and services. Clients act as the worksite employer, retaining supervision of employees and business management.
This creates a win-win situation for management and employees alike. Managers can focus on the productivity and profitability of their business without the distractions of ever-changing, complex human resources responsibilities; and employees typically gain access to enhanced benefits and HR services.
According to the Society for Human Resource Management, three-quarters of Americans are actively or passively on the hunt for new jobs. It can be difficult for smaller companies to compete with larger corporations when it comes to benefits and employment practices, but a PEO can help put them on a level playing field with a Fortune 500 company.
