The Professional Employer

  I’m often asked the difference between a Professional Employment Organization (PEO) and a Temp Agency. That can sometimes be a tricky question because there are a WIDE variety of employment organizations out there depending on state laws, corporate structures, etc. Since there is no one-size-fits-all definition here’s my general definition for those of you grappling with the concepts.

Temp agencies are popular employment venues for workers who are between jobs or looking for seasonal work. These agencies place employees into work situations where a temporary need is found. Sometimes a worker may be off for extended sick time or maternity leave, and they leave a spot that needs to be filled temporarily. Temporary employees are considered employees of the temp agency, while they work at the business location where they have been placed.

Similarly, businesses can find employees through a PEO. Using a PEO is different than a temp agency, however, because the employees are usually employed on a more permanent basis. Those seeking an employee leasing company are typically looking to lease employees long term. While no job is completely permanent, these jobs are longer lived than most temp agency jobs.

Also, employees found through a PEO are usually more of a professional or technical nature than those found through a traditional temp agency. The PEO will interview the company to find out details about the type of jobs they need filled and the caliber of staff they are looking for. While PEOs can be found in many blue-collar working environments, they are also found in executive type work environments as well.

Like I said this is a general answer to a tricky question.

  The Tuscon Citizen published great article on the role Professional Employers play during a recession.  Here’s an excerpt:

In today’s market, owners of small and medium-sized businesses may be forced to ask themselves a few critical questions:
“Will a recession affect my business?”
“How can I be sure my employees are taken care of?”
“How can I be successful when others are struggling?”
One way business owners can begin to address these difficult questions is by using the services of a professional employer organization.
A PEO serves as a human resources department for small- and medium-sized businesses. By entering into a relationship with a PEO, companies receive assistance with payroll processing, employee benefits management and compliance with the growing number of federal and state employer-related laws and regulations.
In short, PEOs can help small- and medium-sized businesses manage risk. This is essential during periods of economic downturn when there are more workers’ compensation claims and terminations, and increased opportunities for unemployment-related risk.

For the complete article CLICK HERE.

  According to the latest surveys by the Federal Government on Drug Abuse about 2% of all Americans are addicted to illegal drugs, about 6% are casual users of illegal drugs, and about 25% have used illegal drugs in the past year. A survey by the U.S. Substance Abuse & Mental Health Services Administration indicates about 10% of people abuse presciption drugs. Another nationwide survey shows that more than 10% of employees who agree to have a background check conducted on them have criminal histories. Suppose one of these employees is working for you?

Employees with substance abuse of criminal histories can be a major liability if you fail to properly screen for these issues. Companies who employ negligently are being sued all the time. A study conducted in 2003 shows that companies lose more than 80% of all suits relating to negligent hiring. Average damages slapped on companies are in the range of $1.5-$2 million.

Read more »

  One of the main challenges that small and midsize businesses face is managing and caring for their employees. Factoring in payroll, taxes and insurance costs, employee-related costs can be one of a company’s largest expenses.

Once you hire employees, you are required to pay them a salary, pay unemployment fees and take out workers’ compensation insurance. Depending on the number of employees, larger companies normally delegate employee-related functions to a human resources department. But what should a company do when it has too few employees to justify creating a formal HR department?

This problem has given rise to Professional Employment firms that companies contract with to take over certain employee-related tasks. Outsourcing to a Professional Employer takes the HR burden off smaller businesses and transfers them to an outside firm that specializes in the various areas of human resources: payroll administration, benefits, and employee orientation and training.