Advantages of using a professional employer organization for HR

Small businesses looking to hire additional staff can face a daunting task. Reviewing resumes, conducting phone screens and scheduling interviews all require time that may not be available, particularly if the organization isn't big enough to support the implementation of human resources staff. However, there is a solution to this problem and that is hiring a professional employer organization.

Outsourced human resources functions are ideal for entrepreneurs who must focus on other critical areas of their businesses, but still need help with general HR functions, such as hiring and benefits administration. By utilizing a service of this kind, business owners have an opportunity to deal with day-to-day tasks, while also providing a level of confidence that back office functions are still being handled properly.

"When tedious HR responsibilities are eliminated, managers are freer to focus on core competencies and grow their business," Georgina Clatworthy wrote in an article for Business2Community. "A second advantage is the access to higher caliber benefits packages. Another advantage is the lower cost of worker's compensation insurance that PEOs are able to negotiate."

What to look for in a PEO
When making the choice to utilize a professional employer organization, there are a number of things to look for with respect to the services being offered. Here are a few of the most pertinent:

  1. Check their references: Before making a PEO choice, it's important to understand how the company's other clients feel about the value they are receiving. In order to gather this information, ask for a small list of the customers they currently have and poll those businesses to ascertain if the PEO will be a good fit.
  2. Gauge the level of service: Considering the investment being made into the service, it's important to understand exactly how customer-focused a professional employer organization is. If there are issues, can they be handled over the phone with a live representative? If there are questions or concerns, how quickly do they respond? Understanding how much support is offered can lead to the selection of a company that meets other HR needs as well.
  3. Check their experience level: Knowing that a PEO is well versed on local laws and regulations with respect to human resources is critical. It's also important that they be accredited by the Employer Service Assurance Corporation as this gives an added level of confidence in their competencies.