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Is a PEO the Right Decision for My Company?



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When it comes to outsourcing human resources, the question is not whether to outsource these services or not, but which services to outsource. Companies have many options on how to manage their human resources as they can hire an internal HR team to manage specific outsourced tasks such as payroll or employee benefit services or serve as their Human Resource Outsourcers (HRO), or can hire a company to serve as their Professional Employer Organization (PEO).

Let’s first look at an HRO. An HRO services clients by providing services chosen by the client. An HRO serves as a team member, managing what the client does not want to keep in house. A PEO on the other hand, handles all of your HR needs, including payroll and administration, employee health and retirement benefits, workers' compensation insurance, state and federal compliance issues and even employee training.

A PEO is a popular choice for small businesses as allowing a firm to be your PEO means your employees are included in a larger benefits community, allowing small businesses to give employees competitive insurance and 401K options that typically would be expected in larger organizations. A PEO also allows you to focus on your core business as well as the hiring, firing and supervision of your employees.

So why choose a PEO for my company?

  • PEOs manage hundreds of thousands of employees and because of this, can purchase insurance and benefit plans at a significant savings or allow you to offer higher-quality plans to attract and retain skilled employees. Experienced professionals in HR, benefits, payroll, risk management and other aspects of employee administration are working on your behalf. The PEO manages the implementation of plans that will enhance your employees benefits such as 401Ks or flexible spending accounts.
  • The PEO will create employee handbooks and will ensure that all policies and procedures stay in compliance with ever-changing state and federal laws and regulations. 
  • A PEO will help you manage employment-related regulatory compliance such as ADA, payroll, OSHA and EEOC. 
  • The PEO provides employees with online and paper access to payroll records, benefits, personnel data, vacation and sick-time accruals and specialized reports. 
  • If you have an HR-related employee claim, such as a discrimination allegation, a PEO will know what to do and will take the lead on managing the claim process.
  • If you decide to open a business in a state that you have not done business, a PEO will manage the opening of the office, all required paperwork and the hiring of employees, making this big step easy and risk-free.

LBMC Employment Partners offers services as a PEO. For more information on how LBMC Employment Partners can help you with PEO services, give us a call at 615-369-5050. 

Learn more about our PEO.

Posted in: PEO, HRO, Employee Benefits