As your organization grows your HR needs change. If hiring more people to take on the added workload in your HR department isn’t an option, you might consider using a PEO. Professional Employer Organization allows you to outsource your HR role, to assist with all aspects of your HR needs. This includes your healthcare plan.
Here we look at the pros and cons of PEO and what they mean for your organization’s healthcare plan.
PEOs provide services to manage and maintain your HR needs including:
When you use a PEO you have more time to focus on operations and let the PEO take care of your HR needs. This ensures employees’ needs are met, while also remaining compliant.
When you work with a PEO, it creates a co-employment model. This means the PEO is the employer of record. As a result, they become responsible for liabilities associated with your company’s HR role. Your payroll operates under the PEO’s tax ID numbers which means they carry the risks. It also means you lose control of this function. This becomes more evident, as in this partnership, you’ll be expected to comply with their policies and procedures.
These might differ from what your employees are used to and in turn should you face employee issues, the PEO will only help if you’ve adhered to their guidelines. Right now, you’re only worrying about following federal, state, and local laws. Many organizations prefer finding a solution that allows them to maintain complete control and follow their own HR policies and procedures. You also maintain your own HR management strategy and your company culture.
So what are the positive impacts a PEO has on your organization and healthcare plan?
The biggest impact you’ll see is that you could offer your employees a far more enticing healthcare plan.
On the flip side you will have to weigh the cons of a PEO:
If you feel the cons outweigh the pros, it makes more sense to look into HR management software. The software helps perform the same duties as a PEO, without taking away control or forcing specific, inflexible healthcare plans on your team.
About The Author
Ingrid is the Content Marketing Manager at Paypro, managing both inbound and outbound marketing initiatives for the company. She has 15+ years’ of extensive marketing communications experience, leveraging brand awareness and strategic partnerships to increase sales revenue for a diverse group of B2B brands.