subject: Peo Services And Making The Right Choices [print this page] Peo Services And Making The Right Choices
Compared to leasing or buying a house or a car, the decision to lease your employees is a distinct course of action, although it has its similarities. It is important to learn how to distinguish this course of action as it can be quite compelling and difficult. Generally, because of the factors of costs and benefits to the company and its repercussions, the leasing of employees is not for everyone.
While there are companies which stand to benefit from PEO services, there are some which may not be ready for such paradigm shift. There are some similarities in leasing or purchasing a car or a house, but ultimately, you would have to figure out the necessity of this venture depending on the needs of your business.
The employee leasing basically contracts workers that are already in the company's fold. There is basically no need to make personnel changes and the different operational tasks and schedules remain the same. The changes are mostly in the areas of workers compensation, human resource management, tax payments, employee benefits, payroll, and other systems to manage the personnel resource. Payroll services are highlighted features of this leasing system.
The leasing service takes over the professional management of the human resources department and streamlines its operations for the benefit of the company. With such service, the company only handles a lump sum amount in terms of payroll in each cycle with the details of the payroll to be handled by the leasing service.
There are also benefits to the employees being hired by the leasing service. Because leasing companies are typically larger than a given company, the benefits to employees are consequently larger and insurance for employees would turn out cheaper because of volume considerations. In terms of PEO services, because of a bigger pool of human resources, lower insurance rates are imminent. When you have a smaller company composed perhaps of 50 to 100 employees, then there is a smaller risk pool and this would drive the insurance rates higher.
There are also certain drawbacks to getting employee leasing services which may be undesirable for some companies. When you engage its services you are compelled to delegate the hiring and firing rights of all leased employees. Even the reassignment of employees becomes the leasing company's responsibility and privilege.
Although you have supervisory rights over these employees, the general management and Payroll Services rests in the leasing company and you effectively lose tight control over them, which would be a disadvantage in certain instances. While some companies consider this as a virtual loss of power over their domain, there are also companies that are relieved in not having to worry about managing their personnel affairs.
There are some businesses that are gratified with the easing of the burden in taking care of their employees and in these instances, employee leasing becomes beneficial to the company.
