To help reduce costly mistakes, an increasing numbers of companies are turning to a professional employer organization (PEO) to have better access to experienced HR consultants who can help with many time-consuming HR functions.

A Professional Employment Organization is a single source provider of HR outsourcing that will serve as a human resources department for client companies who want to utilize their services to reduce costs and raise efficiency.

PEO’s provide experienced human resources specialists who perform the duties of a staffing agency while also extending HR consulting and management of payroll services, risk management, employee benefits and other human resources functions.

The reason PEO’s work so well for small and mid-sized companies is because they assume the responsibilities and risks of employee maintenance.

When hiring a PEO, client companies enter into a practice referred to as co-employment. They take on the burdens of procuring and retaining employees as well as the tasks of assuring government compliance and the requirements of safety and workers compensation by becoming their employer of record for tax and insurance purposes.

A  PEO supplies companies with administrative services, reduced liabilities, benefits outsourcing, employee benefits, employee handbook, employee/labor relations, employee leasing, HR consulting and HR management.

A full service PEO will provide the following:

• Payroll Services
• Recruitment  services
• Risk Management
• Employee Benefits
• Human Resource Services

Hiring a PEO means a company can focus on their core business and cost-effectively outsource the expense and often complex employee relations that can strain a company’s budget as well as deflect from achieving their overall goals.

A professional employer organization will enable business owners to enter into a co-employment relationship knowing that the successful management of employees is in the experienced hands of human resources administrators whose number one priority is to save their client company time, money and effort.

Small businesses need to continue to grow in order to for the middle class to flourish and remain a stabilizing economic force. It is often said the middle class is the backbone of the American economy. This is certainly true when considering the combined contributions small businesses have made to their communities as well as to the nation’s economy as a whole.

Large corporations are considered too big to fail and the damage brought about by their demise is a topic widely debated. However, the impact of loosing a good portion of the small businesses responsible for significantly raising the standard of living and being one of the most effective driving forces of the affluence enjoyed throughout the 1980s and well into the 2000s is grossly underestimated.

Small business is vital to keep the opportunities open for hard working individuals with an entrepreneurial spirit to positively contribute to the economy.

It is not only important for banks to keep loaning money and ensuring that small businesses have the capitol they need to expand and help nourish the sickly economy back to health, but also for small business owners to take advantage of all the resources that are available to them.

These resources include human resources outsourcing to cut costs, stay competitive and have access to a more skilled and reliable work force.

Small businesses are critical to economic recovery. Over the past ten years small businesses were reportedly responsible for nearly 80 percent of the new jobs created annually. This is why it is so vital for them to not only be supported by our government, banks and other financial institutions, but it is also necessary for small business owners to utilize all of the tools in today’s tool shed, which includes human resources outsourcing as a valid cost cutting and time saving business solution.

Today, Human Resource Outsourcing is catching up to software outsourcing as a growing practice among small, mid-size and large companies. The burden of managing human resources has become too much for some businesses that are looking to reduce costs during such tough economic times.

For this reason many companies are not only taking advantage of HR outsourcing but it is becoming more common for businesses to actually utilize comprehensive human resource outsourcing.

Comprehensive HR outsourcing involves a company not only relying on HR outsourcing for special projects or particular department functions but also for the major functions of the company like payroll services, recruitment services, employee benefits and more.

Comprehensive HR outsourcing not only reduces costs and taps into more experienced skill sets but will also help a company to cut HR costs and improve management-employee relations.

Comprehensive HR outsourcing has also proven to be beneficial in shortening employee turnover while raising employee satisfaction and increasing productivity.

Companies choosing Comprehensive HR outsourcing for HR functions, benefits, health and payroll as a viable business strategy have found they are controlling costs, improving employee productivity and reducing their assumed risk with full time employees.

Here Are Some Of The Reasons Businesses Are Choosing Comprehensive HR Outsourcing:

• Increases efficiency, productivity, cost effectiveness and expertise
• Reduces the risks with government compliance, safety and worker’s compensation, pension administration, HR audits and other legal issues.
• Improves employee/labor relations.
• Raises the return on investment (ROI) for human resources.
• Lowers costs of health benefits and other expensive benefits packages.

Human Resources outsourcing can be extremely profitable for businesses if the process is implemented correctly and managed properly. However, there are many misconceptions about the transition into utilizing HR outsourcing as a standard practice.

Some of these common misconceptions include:

•    Outsourcing means all risks are passed on solely to sub-contractor.
•    Outsourcing means companies no longer share responsibility for paying out benefits.
•    Outsourcing means functions are independent entities and no longer require expert management.

The benefits of outsourcing are the reasons organizations large and small are opting to outsource many of their functions.

These benefits include:

•    Reduced Costs
•    Elevated Levels of Efficiency
•    Generated Income
•    Entering Into New fields of Technology , Research and Development
•    Greater ROI, Customer Satisfaction and Share-Holder Value
•    Increased Flexibility

These advantages are currently driving the popularity of outsourcing. More and more, companies are transforming their models to incorporate HR outsourcing into their business strategy.

In order for organizations to move beyond the outsourcing for routine administrative functions such as annual benefits enrollment, recruiting, employment processing, healthcare administration and retirement plan administration into more comprehensive outsourcing practices, they are looking for providers of expert management services to avoid the many pitfalls of an inadequate outsourcing structure.

This is why large corporations and mid-sized companies as well as smaller business are finding that a professional employer organization (PEO) is the safest and most secure way to maintain successful HR outsourcing.

PEO service companies share the human resource management responsibilities and provide expert administrative functions to ensure the outsourcing relationships between companies and contactors are streamlined and operating smoothly.

PEO services also enable businesses to offer enhanced benefits packages which elevate the level of efficiency and attract more qualified recruitment possibilities.

A Professional Employment Organization will relieve the burdens of employee/labor relations, government compliance, HR audits, safety and worker’s compensation, employee development, training and much more.

When deciding to utilize HR outsourcing, companies understand that by hiring a PEO for expert management they are able to focus on their core business, productivity and profit margin.

Currently there is a significant spike in the employers who have less than 25,000 employees choosing to outsource human resources. These companies have found that there are many benefits of using a professional employer organization (PEO). Among the top three reasons medium-sized businesses are incorporating HR outsourcing into their strategy is they are able to remain focused on their core business, operate more efficiently and cut costs.

More companies are deciding they no longer want to place capital expenditures solely onto their own human resources and are opting instead to outsource to stay competitive.

In the last ten years outsourcing has become more popular among companies who want to expand but want to control costs by eliminating full-time in-house positions that don’t directly make a significant contribution to the bottom line.

Human resource outsourcing has become a viable strategy and is growing rapidly in the United States as well as overseas. Companies that have made the decision to outsource HR find that they are receiving a higher quality of expertise at lower costs which improve their bottom line.

Another shift taking place is being made towards selective outsourcing. Companies are beginning to use multiple vendors and are only choosing to outsource specific departments and job functions.

However, using multiple vendors requires management to become more adept in contract management as well as to become more knowledgeable in service costs, standardization and detailed protocols when dealing with external providers.

As HR outsourcing is becoming increasingly popular, managers are looking for guidance and information to help them make their decisions about recruitment services and how to find the right professional employer organization.

The following are some of the benefits of using a professional employer organization (PEO) for the outsourcing process.

•    A PEO will enable companies to effectively outsource the management of human resources, risk management, employee benefits, payroll, workers’ compensation, training, development and other services.

•    A PEO will perform extensive searches for qualified candidates with expertise in a required field such as technology or programming.

•    A PEO will reduce legal liabilities such as safety and worker’s compensation, employee/labor relations, government compliance and other regulatory processes involving human resources.

•    A PEO will often offer more attractive benefits packages and attract employees with a higher skill set.

HR outsourcing has become more common in recent years because it is a very effective way for companies large and small to contain costs, reduce administrative burden and minimize risk.