The Professional Employer

  To run a business, you need a grasp of current employment practices, a detailed employee handbook, and to comply with all federal and state labor regulations. A Professional Employment Organization (PEO) can manage these administrative responsibilities and free up your in-house resources to concentrate on growing the business.

Hiring PEO services involves more than simply passing your HR responsibilities over to them: the PEO actually become a co-employer of your personnel. As the legal “employer of record” for your entire staff, the PEO hires your employees and leases them back to you. They then use their own tax ID to submit payroll records and file taxes, offer benefits, and secure workers’ compensation insurance.

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  Termination is always painful, even when the cause is a slumping economy. An employee’s first reaction to the news of a lay off is fear of loss, and fear is always followed by protective anger. Some employees act out their anger with violent action and others with legal action.

Of course, you can try to ease the pain by handing out generous severance packages, outplacement benefits and counseling. Give out written information about the support the company will give and let employees know you are providing cushions, even though you aren’t legally required to. But don’t expect these provisions to satisfy all distraught ex-employees.

The most secure provision for a business is to never be forced to terminate a worker. This is possible through some Professional Employment Organizations (PEO) by a special agreement known as ”worker leasing“.  In a worker leasing agreement all workers are employed by the PEO. The PEO leases the workers back to the business, which continues to make all personnel and operating decisions. If the economy slumps or a worker fails to perform to the business’ satisfaction, the worker is released back to the PEO which will reassign the worker elsewhere.

Through worker leasing no one is laid off or fired therefore workers are less likely to experience the feeling of loss and the subsequent anger. And in the event a worker objects and is upset by reassignment process the PEO will provide counceling and settle any disputes without disrupting the business. The bottom line is Worker Leasing = No Terminations.

  If you deal with people, you will, sooner or later, have to deal with conflict. Since no two people view the world exactly the same way, disagreement is quite normal. In fact, anyone who agrees with you all of the time is probably telling you what you want to hear, not what he or she actually believes. The real question isn’t how to avoid conflict, it’s knowing how to work through it.

Conflict between employers and employees can lead to arguments, misunderstandings, and miscommunication which are some of the biggest time-wasters in the workplace. Every minute spent on “drama” is a minute of productivity lost by the employer. Left unmanaged these conflicts can lead to bad feelings and even violence. This makes conflict management critical to avoid arguments and ultimately litigation.

Conflict can be avoided if steps are taken early in the employment relationship. Efforts spent on quick conflict resolution have proven to be the most cost effective measures for reducing and eliminating claims. Professional Employment Organizations (PEO) can help you with these problematic, interpersonal areas. Why use a PEO? Because sometimes, conflict between your employees can have legal implications involving harassment, discrimination, and employee rights. A PEO will consult with you about employment laws regarding these sensitive topics and in some cases act as an intermediary.

  YAHOO! SMALL BUSINESS has a good article for entrepreneurs who are considering bringing on employees. In it they offer tips such as:

Recruit “Superstars” Only
With great people in each position, your odds of success go way up. You don’t have a cushion of extra time or leftover resources so it’s essential that every employee be an extremely capable “superstar” at what he or she does and be well coordinated with the rest of the team activities.

Make a Recruitment List
Always keep your feelers out, and make a target list of the twelve most valuable superstars you would like to recruit and continuously work those relationships. We actually found some of our best employees through other small business contacts. That’s why it’s a good idea to regularly attend networking events, and ask for referrals from customers, business associates, competitors, and current staff members.

Review Your Plan with Candidates
Superstar people seek more than monetary compensation, such as being part of the team and taking pride in their achievements. That’s why it’s a good idea to walk through your business plan with candidates, but be sure to appeal to their goals, rather than just asking them to meet yours.

While these are wise tips YAHOO! SMALL BUSINESS has omitted a crucial tip. They start their article by stating “the most important” move an entrepreneur can make is to “realize your strengths and weaknesses.”  Coincidentally employment and payroll management is a major weakness for most entrepreneurs.  After identifying your weakness they then advise entrepreneurs to “find high-quality people to fill in the gaps”.  That’s true, but they fail to mention that a Professional Employer (an expert in employment strategies) is one of the best options for filling those gaps.  By outsourcing HR responsibilities to a PEO an entrepreneur can save a lot of time and money and also avoid numerous legal pot-holes.