What is the role of PEO's and ASO's in today's workplace?
Human Resource Outsourcing (HRO), PEOs and ASOs in particular, are a response to market demands for change, especially for small businesses.
American business is undergoing fundamental changes in human resource management and HR Outsourcers are a response to these market forces.
Several factors are driving the industry change:
- Over the past 20 years, there has been a significant increase in employment-related federal, state and local laws and regulations.
- The breath of expertise required to manage a small to mid-sized company has outgrown the experience and training of business owners and managers.
- Highly skilled employees demand quality, low cost health care, retirement savings plans and other employee benefits for themselves and their families.
In response to these demands, HRO has evolved. Today, PEOs and ASOs provide cost-effective products and services that business owners need to manage an ever-changing workforce.
Do government agencies like PEOs?
YES. PEOs can consolidate and ensure tax collection, extend benefits to more workers, communicate government requirements more effectively and resolve problems before they reach the court.
Can PEOs work with Unionized Labor?
PEOs and ASOs work equally well in union and non-union worksites. The National Labor Relations Board (NLRB) recognizes that in co-employment relationships, worksite employees are appropriately included in the client employer’s collective bargaining unit. Where a collective bargaining agreement exists, PEOs fully abide by the agreement’s terms.
What are business leaders saying?
“For many business people, there simply isn’t enough time in the day to build a company and run a human resources operation … a growing number of small firms are solving the problem by outsourcing the HR function…”
Business News New Jersey
“…PEOs behave much like consultants, helping clients tap into the latest health benefits and comply with complex labor regulations related to discrimination and workplace safety. PEOs are becoming one-stop shops for business owners eager to outsource all their HR functions and focus instead on their core business. … PEOs make the most sense for business owners who can’t afford a dedicated human resources staff and don’t have the time to handle day-to-day HR issues themselves”.
Inc. Magazine
"In today's competitive marketplace, it is often rough going for small businesses that are determined to provide premium benefits packages that will attract and retain top-notch employees, because they are at risk of chaining their profit-and-loss statement to an anchor. …Faced with the challenges of providing premium benefits, and keeping up with the growing number of government regulations and mounting paperwork, more small and medium-sized companies are turning to professional employer organizations to manage their human resources functions."
Employee Benefit Plan Review
“We recognize that PEOs can have access to better benefit packages, delivered economically”.
I.R.S. quote, Houston Business Journal
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