HRO BUSINESS MODELS
Recently, many people have asked about the different approaches to Human Resources Outsourcing. The basic premise of HRO (and outsourcing in general) is saving time and money while improving the quality of services to employees. There are some common business and operational practices among the different business models. Each model has benefits and challenges and here, we will discuss some of the differences in each model.
Professional Employer Organization (PEO):
A professional employer organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration. In a co-employment contract, the PEO becomes the employer of record for tax and insurance purposes, filing paperwork under its own identification numbers. The PEO firm leases the “employees” back to the client. The client company continues to direct the employees’ day-to-day activities. In the United States, many small to medium size professional services firms utilize PEOs to allow them to provide the kinds of benefit plans which otherwise could only be made available at a prohibitively high cost to both the employer and the employee.
Administrative Services Outsourcing (ASO):
flexible model, administrative services outsourcing (ASO) offers many of the same services and benefits to you and your employees as the PEO offering. The main difference is that you do not enter into a co-employment agreement as you would with a PEO and your organization remains the employer of record. The ASO model works well for companies that may already have competitive benefit plans in place, but need additional HR support, benefit program administration, risk management, payroll processing, HRIS, or other HR services – plus the time and resource-savings that come with a consulting provider partnership.
Human Resources Consulting Services:
HR Consulting Services can include ongoing HR support and guidance to ensure compliance and keep you abreast of regulations, HR consulting, management training, employee handbook and policy development, safety services, and more.
Your organization may already have a human resources staff or a number of employee-related services, (e.g., payroll processing, benefit packages, etc.), but may require additional HR support. HR Consulting will provide the tailored human resources services you need to enhance the scope and professionalism of your HR practices – without diverting additional time and resources from your core business.
Charting the correct course for your organization begins with an in-depth, structured analysis and needs assessment of your HR practices. The results direct the development of a customized program of HR services that meets your specific needs and business objectives.