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Has anyone ever used a PEO HR company?
We have an 8 employee office and I'm getting behind with all the HR details. I'm considering outsourcing most of my HR duties to a PEO. Is that a smart move or do you think we are too small to use a PEO? What would be the benefits of hiring a PEO vs. just outsourcing our payroll?
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6 Answers
Hi Ed – as an independent HR/OD Consultant, I work with many privately funded and venture-backed clients throughout Norcal and Socal. Over the years, I’ve evaluated the PEO offerings of Administaff and TriNet and their ‘fit’ for some of my client companies. Before you take the plunge to outsource your tactical/operational HR initiatives, I’d encourage you to assess your current and projected (based on planned growth) pain points. What is it that needs to be solved – i.e. communications, employment/recruiting, new hire on-boarding, administration (employee handbook, personnel policies, personnel files, I-9 administration, UI claims management, workers’ comp, performance management and performance reviews), compensation (exempt vs. non-exempt classifications, minimum and living wage compliance, compensation program development and management), Benefits (selecting, implementing, managing), career progression (defining career paths, promotions processes, succession planning), training & development, safety programs and training, grievance/discipline procedures, terminations/off-boarding, payroll, systems/record keeping, other insurances (D&O, EPLI, etc.). While you’re 8 people strong today, what kind of human capital growth is planned for your organization? While most PEOs require a minimum of 5 employees at a client company, depending on your current and projected growth and corresponding pain points, you may find that a PEO solution is like taking a sledge hammer to a tack. To assist you in evaluating PEOs, take a look at PEOcompare.com. There are other HR outsource solutions available, that might be worth your evaluation. For instance, Algentis (www.algentis.com), based in SF downtown is not a PEO, but provides HR expertise & compliance, payroll processing, employee benefits, and employment insurance. Other than having evaluated and implemented HR outsource solutions at client companies, I have no alliance to any one provider.
Hi Ed,
There are many terrific PEOs that can help you, if that's really what you are looking for. Payroll is exactly that. You'll pay $3 - $5 per check on top of fees for quarterly tax filings and processing as well as W-2's and year end filing.
You could expect to pay less than $3,000 for a weekly payroll.
PEOs do much more. They handle all of your payroll and benefits administration, HR compliance,workers compensation and risk management. They offer competitive medical coverage, a wide array of benefits and 401k plans. Their internal staff are specialists in employment practices, and are available 24 / 7 to assist you.
As you would expect, the fees for a comprehensive service model like that of a Professional Employer Organization is more than for a simple payroll provider. Fees can range from $800 - $1800 per employee depending on the area of the country and the quality and level of services you require.
If you were do add all of the benefits a small business owner receives, most people find that it is far less than trying to obtain them individually.
Thanks for letting me add my 2 sense
Bruce Silver
Employers Rx LLC
The CURE for your employee management headaches
http://employers-Rx.com
Hi Ed,
Even with a group your size, there are many advantages for a small business to work with a PEO.
Like the previous posts have stated working with a PEO is VERY different than just using a payroll service.
PEOs provide not only payroll solutions but a wide variety of other HR related products and services including workers comp insurance, fortune 500 style benefit packages, strategic HR solutions, access to HRIS systems, and much more.
One of the greatest benefits our clients are utilizing right now is compliance support with all of the changes taking place with health care reform. Huge for a small business that might not have access to the expertise needed to stay up to date on the changing legislation.
I would suggest doing some research on several PEOs to determine which the best fit is for your company. And Bruce is correct; you will invest quite a bit more with a PEO but the advantages are much greater.
Good luck on your search!
Niki Tycholis
949-244-1202
ntycholis@advantec-hr.com
Hi Ed,
If you're looking for a PEO with high HR support, I would suggest Emplicity. A contact would be Vic Tanon, vtanon@emplicity.com, 650-587-5214.
I think PEOs work well for small companies since benefits will be given large group rates instead of age-banded rates. Positives for PEO vs payroll only are that they do all of the COBRA and leave administration, one place to contact for adding/terminating benefits, HRIS included, a place to call for any questions.
Hi Ed,
I have worked directly for two of the leading PEO's in the U.S. (TriNet and Administaff recruiting for Sales Consultants to sell PEO to SMB) and depending on your needs/growth of company either may be a great option. I have great contacts at both and also a great contact at Paychexs (which is more a la carte). You may also want to check out www.napeo.org to get an idea of PEO in your area (boutiques and larger players in your area).
Heidi M. Smith
415.577.0472
heismi2002@yahoo.com
http://www.linkedin.com/in/heidimsmithsanfrancisco
Hi Ed,
If you are still considering outsourcing your HR duties to a PEO, I would just make sure you do your research. You are not too small to use a PEO, however, there are definately some PEO companies that cater to the larger businesses and some who specialize in smaller businesses, even focusing on companies from 1-10 employees. You will want to know exactly what services each PEO offers, even if those services do not apply now, they may in the near future. I agree with Niki in that one of the huge benefits right now in using a PEO is compliance support with health care reform. Bruce is correct as well when he says that you may make more of an investment with a PEO but the advantages are well worth it. PEOcompare.com allows you to compare individual PEO services side by side and also has an unbiased automated tool that matches you up with the best PEO for your unique business needs. www.napeo.org is another resource for finding PEOs in your area.
Best of luck on your search!
Carolyn Stoll Sokol
www.PEOcompare.com
727.940.3786
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