It’s pretty clear to me that most businesses should focus on their core business, and move non-core functions to experts outside the organization. One over-looked opportunity for many companies is to consider a PEO.
PEO stands for “Professional Employer Organization”. A PEO’s is a legally recognized entity that allows business to co-employ their associates with another company. The PEO provides many of the HR services companies need such as managing the 401K program, health insurance, flexible benefit program, employee handbook, tax reporting and other compliance duties. Typically, the PEO does not make hiring or firing decisions but can assist the business with terminations or layoffs when necessary.
My experience has been that for businesses under 100 employees, using a PEO can eliminate the need for a part-time or full-time HR director. AND, the HR manager provided by the PEO may have more experience and training than a small company can afford. While PEO’s aren’t for everybody, they’re worth a look.
While I have personally used and recommend Waterstone HR located in Mequon, there are many PEO’s licensed in the state and each has areas of strengths. One caveat. Don’t look at a PEO as a simple health insurance program. While you may save money on health insurance premiums, consider the total cost of your HR function including the time spent each year reviewing insurance and 401K programs, internal HR staff costs that can be eliminated or redirected, maintaining annual government compliance requirements and government reporting.
As Yogi Berra once told Steve Forbes, “If you aren’t focusing on your core business, you aren’t focusing on your core business.”