A professional approach: PEOs take the headache out of administrative tasks.

• Author: Mischel, Marie
• Position: Workforce: Staffing and Benefits - Professional employer organization

For CEOs and business owners who want to concentrate more on running their business and less on employee issues, a professional employer organization (PEO) may be the way to go.

Outsourcing administrative tasks often makes tremendous business sense and brings financial rewards, says Michelyn Farnsworth, owner of Innovative Staffing Inc (ISI). PEO model offers a wide range of viable solutions for businesses across many different industries. By outsourcing their non-productive administrative tasks, like human resources, benefits and payroll administrative tasks to a PEO, companies can take advantage of the PEO's economy of scale and broad expertise, while saving money and resources," says Farnsworth.

Rick Bartholomew, CEO of A Plus Benefits, agrees. "Businesses exist to create products and services at a profit. They don't exist to perfect payroll processing, e-verify, drug testing, 401(k) management, COBRA administration, FMLA tracking, worker's compensation claims filing, and on and on it goes."

GET THE RIGHT FIT

When considering making the change to a PEO, Aaron Call regional president of G&A Partners, suggests asking yourself four questions: "First, do you value your employees? Second, look at your current vendor relationships. Are you willing to consolidate to drive efficiency? Third, are you looking for more time to properly manage and grow your business? Fourth, are the increasing costs and regulation associated with employment hindering your ability to grow? If the answer is `yes' to all four, then you should strongly consider using a PEO."

But not all PEOs offer the same services. "All PEOs do at least the basics: payroll processing, benefits administration and human resources support. Beyond that, each PEO approaches the details differently," Call says. "Differentiation generally shows in available technology, employee benefits depth and pricing, risk and safety services, human resources."

Even with the basic services, needs can vary greatly from one client company to another, Bartholomew says. For example, for some businesses payroll is very simple, while others may need to manage numerous payroll deductions; department, job and government reports; a variety of pay types; and PTO tracking.

"Employee benefits needs also vary," he says. "A PEO can expand available benefits for business with major...