In a nutshell, with a Professional Employee Organization, a business “co-employs” their employees, and the PEO manages all of their HR needs, payroll, and benefits.
Sounds great, huh? Well, yes – in theory, but re-read the word, “co-employ..."
This word essentially means they now have a business partner they may not want in their business. Businesses often give up control of HR decisions for their employees when they contract with a PEO. They have to fit into their box, go onto their benefits and retirement plans (they often can’t choose their own), do what the PEO says related to their hiring, firing, HR and legal matters and, if they don’t, guess what? They are in violation of their contract with them and that can be cancelled causing the business a lot of hardship because they have to “unplug” from all the entanglement a PEO causes.
On top of control concerns, the fees to use a PEO are typically 75% greater than what they would pay an “ASO” (which means Administrative Services Outsourcing) for the same level of HR service…while still retaining control of decisions regarding their employees and benefits. And they don’t get an unwanted partner in their business- they still make ALL the decisions.
innovateHR is an ASO– We know we are biased, but we believe this is the best approach for those wanting to outsource HR but still maintain control for a fraction of the cost of a PEO.
