Chris Chaney
Chris Chaney is manager of member communications at the National Association of Professional Employer Organizations in Alexandria, Virginia.
Associations can gain human resources expertise and hand off administrative tasks by hiring a professional employer organization. Here are a few tips for selecting the right one.
Most associations operate within tight budgets and small staffs, so they're constantly looking for ways to achieve maximum impact with limited resources. Administrative tasks and responsibilities, though necessary to the successful operation of the association, can drain resources and steal attention from mission-focused work. That's where a professional employer organization (PEO) can help.
Unlike staffing firms, PEOs don't provide employees. Rather, they function as co-employers of an organization's workforce, and they assume responsibility for HR-related tasks and compliance, which means the association can turn its focus back to running the organization and delivering results. PEOs do everything from administer benefits to assist with regulatory compliance to managing payroll. They assist organizations by:
Providing HR expertise and resources. With a PEO, an association has access to HR resources and expertise, such as up-to-date information on compliance matters, workforce trends, and technology developments. "Since we're a small staff and do not have an in-house HR manager, using a PEO has been the best option for us, and it's led to cost savings," says Beth Loudy, executive director of the State Government Affairs Council. "Using a PEO grants access to expertise we otherwise wouldn't have access to. We even worked with them to rewrite our employee handbook."
PEOs function as co-employers of an organization's workforce, and they assume responsibility for HR-related tasks and compliance.
Offering competitive benefits. A PEO enables associations to provide affordable benefits to their employees. These benefits can be an invaluable recruiting tool as associations look to hire top-tier talent and retain their highest-performing employees.
Handling compliance. The amount of time that organizations spend on compliance can be dramatically reduced—if not eliminated—by using a PEO, which will monitor regulatory changes on the horizon to help clients prepare for changes and disruptions well in advance.
PEOs operate and conduct business across the United States, and they range from small start-ups to large, publicly traded corporations. While all PEOs offer core HR services and solutions, additional services vary by PEO, so associations should be sure to assess their HR and risk management needs before hiring a partner.
Payment structure will also differ depending on the PEO. Some charge a fee based on a percentage of gross payroll, and others charge a fixed fee per employee. Areas of expertise may vary too. Some PEOs focus on serving a particular industry or niche, while others serve a wide range of clients.
Partnering with a PEO is different than simply contracting out a specific project or duty. "Our PEO is truly an extension of our team," says NAPEO Chief Operating Officer Melissa Viscovich, CAE.
When choosing a PEO, associations should consider many factors. NAPEO has a list of guidelines to help with that decision-making process. For example, make sure to accurately determine your company's human resources needs, meet with PEO representatives and ask for client references, and evaluate the PEO's benefits offerings to ensure your employees' needs will be met.
Associations exist to advocate on behalf of an industry or profession and achieve a specific mission. They don't exist to handle paperwork and manage benefits. Using a PEO allows an association to redirect resources to mission-critical objectives instead of time-consuming HR tasks.