Do you need a human resources company?

When choosing a human resources company, you first need to consider what type of relationship will work best for you and your business. There are different types of human resources companies and they all offer a range of services and operate within various human resource models.  Also, what human resources services do you need fulfilled by the company? Are you even aware of what services different companies offer?

One type of business relationship is a professional employer organization (PEO), in which the PEO enters into a co-employment arrangement with the company in need of human resources and its employees. The PEO and the client then share employment responsibilities, while allowing the client to retain essential management control.

The benefits of professional employer organization is that all of your human resources services will be outsourced from the same place and managed by one organization. The purpose of a PEO is to unburden a company and relieve it from the administrative duties and employer-related obligations. If you are considering using a PEO, you might have concerns that you are required to relinquish too much control to this outside source. But the client will always have direct control over all decisions. A client is not required to consult with its PEO before making decisions, employee-related or otherwise.

A company may choose to handle the bulk of its human resources in-house or outsource various services as needed. Perhaps you have decided to handle what you have also hired an outside source to handle your staffing needs, another to handle your payroll and another that you can consult regarding compliance requirements. Depending on the future of your company, using multiple vendors could work well for you. However, for many business owners, it is beneficial to streamline the process and work with one company for all your needed human resources services. Most professional employee organizations will work with you to ensure that you are receiving only the services that you need. A PEO typically offers bundled services for a comprehensive approach to your HR needs. For a company that is growing, or hopes to grow in the future, it could be convenient to have all the services you need in one place. Also, when all your human resources services are handled by one company, it becomes clearer to identify areas of concern that may have been missed with multiple vendors handling all of your HR needs.

Some of those concerns may center on the human resources compliance and regulatory issues that you may not have ever thought of a business owner. The Fair Labor Standards Act establishes minimum wages, overtime pay, recordkeeping and youth employment standards affecting employees. It is important understand who is exempt and eligible for overtime pay. Is your company prepared to handle employee benefits, pensions or termination compensation?

An outside human resources company can handle all of these concerns for your business. Whether you choose a company that can handle all of your HR needs, or decide to outsource tasks individually, there is peace of mind knowing that you are not solely responsible for all HR-related issues. By relieving the pressures of the day-to-day administrative duties associated with human resources, you can be free to focus on the growth and success of your business.