The rise of the Professional Employer Organization
By outsourcing human resources to a Professional Employer Organization, businesses have saved hundreds of thousands of dollars every year. In addition to saving money, companies have also built lean teams focused on more knowledge-based, innovative tasks that have had a direct positive impact on the growth of the company.
That is one part of the story. The often untold story is how PEOs have grown over the last few years and have become successful companies in their own right. They must be doing something right. For all sorts of organizations, from small independent businesses that can’t afford HR teams to Fortune 500 companies, look for that perfect Professional Employer Organization to partner with.
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So what do PEOs do?
PEOs play a wide variety of roles. Companies outsource traditional Human Resources tasks such as managing employee benefits, the entire gamut of payroll management, scouting for talent and hiring employees to a well-run Professional Employer Organization. The role of PEOs has also risen in prominence as many of the HR tasks have grown in complexity. One such example is health care benefits. With government regulations and private insurance company rules, efficient management of health care benefits was becoming a burden on in-house HR teams in companies. PEOs have done an excellent job of obtaining greater employee health benefits at lower costs for a large number of businesses in the country.
Other complex areas include tax compliance, legal claims and compensation claims. With so many PEOs vying for your business, no matter the size of your company, you could have a meeting with the Professional Employer Organization in your region and learn more about what they can do for your business.
PEOs have been so successful in managing HR tasks and services for companies that they have become an integral part of the way corporate American functions. Initially, a Professional Employer Organization would do the basic tasks like accounts and dispensing pay. However, over the years PEOs have grown in scope and are capable of handling complex tasks. This also means that PEOs have become phenomenally profitable and yet, offer cost and other advantages to their clients.
A small Professional Employer Organization has grown to partner with a large number of Fortune 500 companies and has offices across the country. Another one is now listed on the Nasdaq. While these are home-grown companies, there are also many offshore options for businesses that offer great cost benefits.