A PEO provides an integrated, cost-effective approach to the management and administration of the human resources functions of its customers. It does this through the practice of “co-employment” - contractually assuming substantial employer rights, responsibilities, and risk by establishing a long-term, employer relationship with its customer's employees.

Under a co-employment relationship, the PEO:

Yet, the customer retains sole responsibility for such key functions as managing worksite employees, product development, distribution, marketing, sales, and services.

Most outsourcing companies can provide your employees with online access to view their benefits, enroll, and conduct basic transactions. Almost all have toll free 800 numbers.

Most of the large consulting firms handle HR outsourcing but they are still trying to digest all of their Fortune 100 clients and their "backrooms" are being pushed to the brink. Many of the well managed and capable outsourcing companies are not yet household names and therefore are best found by your HR broker. Usually they can deliver several competitive bids within a few days. Some brokers will work with you to better understand the bids and help you make the right choice for your business.

Outsourcing is no longer and IT issue. If you are not talking to your broker about how to save money and leave it to the pros you could be making a big business blunder.

Action Steps
The best contacts and resources to help you get it done

Tips & Tactics
Helpful advice for making the most of this Guide

• Start your HR outsourcing with something simple if you want to reduce risk. You should consider outsourcing COBRA compliance which is a regulatory nightmare and can be very costly if you are not in compliance. Your Employee Assistance Program and Flexible Spending Accounts are other areas of HR that lend themselves to easy outsourcing but relieve you of the administrative burden.