Offsite HR versus Professional Employer Organization

Published by Bruce Silver
Employers Rx LLC
September 29, 2008

Many business owners have asked me to explain the difference between an Off-Site Human Resource Organization (HRO) and a Professional Employer Organization (PEO), also referred to as employee leasing companies. While most of my clients could care less what the solution is called, so long as we resolve their problem, there are clear differences between these two classifications.

When considering whether you should select an HR outsourcing provider or contracting with a Professional Employer Organization, it is extremely important for business owners and managers to identify the weak links with their employee management and human resource administration. Ask yourself, how can we make our company more competitive? What areas of employee administration can be delivered more efficiently? Are your human resource policies and procedures up-to-date. Are you protecting yourself from frivolous lawsuits by adhering to the myriad of federal, state, and local employment rules and regulations? Are you attracting the best employees by providing a competitive benefits program at affordable rates?

There are four key areas to examine when comparing which employee management solution is best suited for your small or mid-size company. The first area looks into the vendor relationship by examining the roles and the responsibilities of each party under each contract. The second area explores the different services you can expect to receive from each solution provider. Next, we will delve into the various service models, and the different ways that services are delivered, their flexibility, and ways it "touches" your management and employees. Finally, we examine market availability, suitability, and a range of costs or savings you could expect.

We will focus in on each of these four areas in detail with a series of posts to follow. The series will offer our insights on an HR Outsourcing industry that often uses confusing and contradictory definitions and terms to describe similar services. Return often to learn about industry leaders, what sets them apart, and why. We will identify the types and levels of professional services that are best suited for your company's size and budget.

We hope you will join us.

More information is available at Employers-Rx.com