Does a PEO Replace My HR Team?

PEO For Existing HR Teams

After four years of building her business from scratch — literally — in her own kitchen, Bridget made a bold move. Her breakfast bakery and catering company was moving up in the world, and she had enough staff that just managing payroll and benefits was taking up the time she needed to spend on developing new products and connecting with more clients.

After looking into human resources outsourcing and PEO, Bridget decided to hire a company to handle HR for her. With experts handling those matters, she thought, she’d never need to worry about hiring internal HR staff.

As her company continued to grow, though, Bridget’s PEO-only decision didn’t always serve her employees well…

What Is a PEO?

PEO stands for professional employer organization. They act as an external business partner, providing expert-level resources and assistance for small and midsize businesses.

PEOs can assist with managing payroll, benefits, HR compliance, health and wellness benefits, worker’s compensation insurance, workforce management technology and many other HR tasks.

Find out more about what PEOs like America’s Back Office do and how they work with their business clients.

Does Human Resources Outsourcing With a PEO Replace Your Internal HR Team?

No, human resources outsourcing with a PEO doesn’t 100 percent replace the need for internal human resource management.

For example, what if one of Bridget’s employees has a dispute with another worker? What if a team has complaints about their supervisor or Bridget comes up with a complex new breakfast pastry that requires staff training?

These are all HR matters, but they’re not necessarily situations a PEO will or can get involved in directly. Matters of coaching, team resolution and training typically need to come from in-house staff.

That doesn’t mean Bridget needs to hire an entire HR team. But she does need a plan for attending to the needs of her employees, whether that’s hiring a single HR manager for now or making time in her own schedule to learn to manage such processes.

According to the U.S. Office of Personnel Management, professional HR staff are an important resource for business owners, supervisors and other leaders who oversee employee performance or are involved in addressing conduct issues. In many cases, it’s better to have those resources in house so they are intimately familiar with your processes, teams, management style and company culture.

Not sure whether you need human resources outsourcing and a PEO or an entire internal HR team? Find out more about each option from America’s Back Office to determine what might be right for your business.

Why Choose a Certified PEO?

Once you decide that a partnership between your internal HR resources — whether it’s one HR practitioner or a few professionals — is a good idea, it’s time to search for a PEO or human resources outsourcing provider. You’ll find hundreds of options online, but there are benefits to working with a certified PEO.

Certification is provided through the Internal Revenue Service. To be eligible, a PEO must demonstrate:

  • Organizational integrity
  • Tax compliance
  • Financial responsibility
  • Knowledge of federal and state employment tax laws

The IRS also requires certified PEOs to have at least one office located in the United States and have a management team that is mostly made up of U.S. citizens or residents.

In short, the IRS does a lot of legwork for you in evaluating and verifying the credentials, knowledge and history of a PEO company. When you work with a certified PEO, you know you’re working with a human resources outsourcing partner that knows how to keep you compliant and has demonstrated the ability to provide fiscally responsible HR assistance.

How America’s Back Office Can Help

America’s Back Office is an IRS certified PEO. It’s a claim that only around 3% of PEOs can make, and we work hard to maintain our status so clients can rely confidently on us for a variety of human resources outsourcing services.

Our turn-key HR solutions include support for legal HR compliance, managing benefits and payroll, developing and managing onboarding and performance review processes, time and attendance solutions and many other needs. Contact us today to find out how we can help your business as a human resources outsourcing and PEO partner.