Professional Employer Organizations (PEOs) are companies that assume the tasks traditionally undertaken by a business’ human resources department. The increasing popularity of PEOs comes from the realization that a small business may not have the staff and budget to concentrate on core products and services as well as tend to the increasingly complex areas of human resources, including:
- Staffing
- Payroll
- Health insurance
- Benefits administration
- Workers’ compensation
- Unemployment insurance
- Government compliance
Some PEOs can assume as much or as little of the HR duties as a business wishes. Others insist on a comprehensive all-or-nothing menu, though these may be tailored to the size of a business.
In assuming these responsibilities, a PEO becomes a virtual employer and is legally responsible for following appropriate laws and regulations. However, not all states have established regulations governing PEOs, and the legal status and responsibilities of PEOs are evolving. The laws and regulations that have been established are inconsistent among the states.
PEOs frequently assume management of risk issues such as health insurance and workers’ compensation, so HR outsourcing (HRO) increasingly is being offered by risk management services.
Yes, you certainly can do it yourself. And chances are, that's what you're already doing. Unless you've already engaged an HR outsourcing firm, you are managing your Human Resources internally.
The question is, did you consciously make this decision, or did you simply take on your HR responsibilities? Depending upon your business and your interest in dealing with HR administration, you may want to consider the outsourcing option.
Regardless, registered SBI users can access a number of HR links, documents, worksheets, and other tools in the Resource Center. If you're an HR 'do it yourselfer' you will want to take advantage of these no-cost tools available exclusively to SBI members.