What is a growing company’s top priority? More growth! Continual HR requests and issues can distract leadership from that primary focus. Professional employer organizations (PEOs) are HR experts that can manage that part of a business. When a company contracts with a PEO, the PEO becomes a co-employer. The term “co-employment” can be very unsettling for business owners. Losing control is one of the top concerns expressed by potential PEO clients. This is a very real concern and we’d like to directly address the various aspects of this issue.
Myth #1: Lose control
Since business owners are used to having control over every part of their business, it’s important to understand how a PEO arrangement works. At MidwestHR, we are responsible for all non-revenue generating tasks including management of payroll, payroll taxes, benefits and compliance with employment laws and regulations. Businesses effectively outsource any administrative responsibility associated with those functions to us.
The client company is still responsible for running actual day-to-day business operations including hiring, performance management, discipline and determining pay rates. We will explain the risks of each employment decision, but ultimately the decision rests with the business. There is a client service agreement (CSA) that outlines each party’s responsibilities in the co-employment relationship. When you know your employees are being taken care of, you actually gain control.
Myth #2: Can’t make changes quickly
PEOs have many clients and business owners worry that they may not be a priority. If an urgent issue arises, they don’t want to chase down answers. Even if it’s not urgent, they don’t want to waste time waiting for the “appropriate” person to respond. Partnering with the right PEO is paramount.
Client responsiveness is a top priority at MidwestHR. We are HR strategists who work to anticipate issues before they become urgent. Urgent issues can still occur, which is why every client is assigned a dedicated account representative. As your partner, we will provide any information and advice needed to make quick changes in the best interest of your employees and company.
Myth #3: It’s hard to find the best PEO
With a PEO assuming responsibility for tax filings, payroll and keeping a business compliant with ever changing regulations, businesses want to know they have found the best PEO for their company. The IRS has developed a voluntary certification program for PEOs that requires fulfilling rigorous financial requirements and satisfying ongoing reporting obligations. PEOs meeting these requirements will be awarded CPEO status.
In business for 20 years, MidwestHR is in the process of finalizing our application to become one of the first CPEOs in the country. This legislation provides important added protections for our clients. Any program that benefits our clients is a top priority for us. Give us a call 630-836-3000 to learn what is a PEO and to discuss all the benefits we can offer.
UPDATE: MidwestHR has been certified! See our press release for more details.