| The recent economic downturn has placed a heavy | | | | RISK MANAGEMENT |
| burden on many businesses. More than ever, | | | | A PEO plays a major role in recommending courses |
| resources are needed to help contain costs, streamline | | | | of action and solutions which help its clients minimize |
| operations, mitigate risks, and reduce costs. All the | | | | risks. To best fulfill this role, the PEO must be kept |
| while, they must continue to build employee morale. It is | | | | apprised of payroll, wage and hour, employee relations, |
| not unusual to hear an owner say, how much more | | | | discrimination complaints, new hires, terminations, |
| can I do, there are just so many hours in the day. | | | | workplace injuries, and other HR issues where the |
| One way many small and mid-sized companies are | | | | PEO can help achieve important goals such as cost |
| achieving these objectives is by outsourcing Human | | | | savings, employee retention and enhanced training - |
| Resources (HR) to a Professional Employer | | | | both on soft skills and compliance. |
| Organization (PEO). A PEO serves as its clients' HR | | | | POINT PERSON, POLICIES AND PROCEDURES |
| partner, managing all aspects of their clients' | | | | In PEO/HR outsourcing relationships that work best, |
| employee-related services, including: payroll, tax and | | | | clients designate an employee to serve as a "point |
| employee benefit administration, regulatory compliance, | | | | person" with the PEO's specialists who manage key |
| Workers' Compensation, unemployment claims, | | | | areas (i.e., payroll, employee benefits, compliance and |
| Employee Assistance Programs and value-added | | | | risks, etc.). The client should select who would be the |
| employee services (e.g., discounts for transportation, | | | | best person to interface with the HR service provider. |
| shopping, travel and entertainment, fitness club | | | | In all cases, there should be a procedure established |
| memberships, etc.). A PEO helps the business owner | | | | for how information should be exchanged with the |
| to focus on the all important business of business while | | | | PEO's representatives. |
| improving employee work-life through enhanced | | | | The true value of the relationship with a PEO is |
| programs and communication. | | | | realized as the client comes to rely on on-target |
| The relationship is not a one-way street, however, as | | | | advice relating to specific areas of service. In this way, |
| organizations that enter into a relationship with a PEO | | | | the best decision-making will be facilitated stemming |
| also have certain responsibilities not the least of which | | | | from the PEO's experience and knowledge thereby |
| are open communications. | | | | mitigating potential risks and intercepting issues before |
| COMMUNICATIONS | | | | a problem becomes serious. In instances where |
| In the beginning of the relationship, the PEO/HR partner | | | | problems could not be averted, the PEO should be |
| will review the organization's policies, procedures and | | | | informed early, providing the PEO with the opportunity |
| programs in light of the rapidly changing regulatory | | | | to conduct an investigation and risk analysis. The PEO |
| environment we are now experiencing. Then, in order | | | | will offer solutions to minimize exposures, and prepare |
| to assure regulatory compliance where necessary, the | | | | the client for any outcomes. |
| PEO will bring their new client into compliance by | | | | Clients who remain informed and involved in their PEO |
| instituting new policies and procedures. New benefits | | | | relationship gain the greatest value from this HR |
| programs will also be recommended and implemented. | | | | outsourcing partnership. While the PEO does assume |
| This information will be exchanged first with | | | | the administrative burden in the relationship, the client |
| management and then with employees so that | | | | must assume the role of communicating, following |
| everyone understands the PEO's role and the new | | | | PEO-established procedures and maintaining an active |
| benefits and services the company will be providing. | | | | interest in the relationship. Clients who are in regular |
| As part of their continuing relationship, the PEO will | | | | contact with their PEOs and who regard them as a |
| keep the client up-to-date with regard to the new laws | | | | trusted advisor, much in the way they view their CPA |
| and regulations that are now emanating from Federal | | | | or attorney, will benefit most from HR outsourcing. |
| and State Governments. | | | | |