| Businesses need to outsource human resource | | | | ability |
| management services in order to succeed in the | | | | • they stay motivated |
| fiercely competitive corporate sector. Businesses can | | | | • their paycheck (out of the PEO’s account) is |
| enter into a relationship with a PEO that takes care of | | | | handed out regularly on time |
| the entire HR responsibilities of the client company. The | | | | • the relationship between employees is maintained |
| PEO relationship is called a co-employment relationship | | | | • employee grievances are taken care of |
| and involves an allocation in the contract that enables | | | | • workers’ compensation claims are handled |
| the PEO to share the client company’s employer | | | | • federal and state government regulation is |
| responsibilities. This is partnership in its entirety. | | | | maintained by the company |
| The co-employment relationship automatically implies | | | | • employees are trained onsite |
| that the PEO contractually assumes some of the | | | | • employee safety programs are administered |
| employer rights and takes over the risks and | | | | • termination process is carried out when required |
| responsibilities associated with employees. PEOs | | | | This leaves the employer or the client company to |
| themselves maintain an employer relationship at the | | | | deal only with the operational side of its business – |
| worksite with the employees of the client companies. | | | | streamlining business processes, improving production, |
| In matters relating to work, the client company | | | | reducing unnecessary costs, and eventually bringing |
| maintains its control over the employees, while all other | | | | about greater earnings. When companies outsource |
| matters are taken over by and communicated with | | | | human resource management to PEOs, they are left |
| the PEO. In other words, the PEO ensures: | | | | with all the resources, time, energy and workforce to |
| • the right workforce is recruited | | | | concentrate on placing themselves on the top rung of |
| • an attractive benefits package is offered | | | | the market in the midst of fierce competition and the |
| • the recruited individuals work to the best of their | | | | vagaries of the economy. |