What Is A PEO in HR?
Posted on 04.16.2019
What is the difference between a PEO, ASO and HRO? There are many HR options available to the marketplace these days, and while that creates great competition and choice, it also creates a great deal of confusion. We’ll explain the differences between each of these models of human resources outsourcing.
WHAT IS A PEO?
A PEO is a Professional Employer Organization. Employers are able to bundle payroll, employee benefits, basic HR administration, and Worker’s Compensation together with one provider. Your employees become employees of the PEO, and thus the PEO assumes limited liability for employment and compliance risks. Your company must adopt the PEO’s policies and practices with little opportunity for customization. PEO’s typically charge by headcount (PEPM, Per Employee Per Month), or a percent of total payroll.
As companies grow, their needs get more complex, and they tend to have greater strategic HR challenges the PEO is not designed to handle. In general, PEOs offer HR advice as part of their bundle because it is expected of them to do so. In most cases, it is not their core competency nor a revenue-generator for their organization.
ASO stands for Administrative Services Only. This arrangement describes an employer who has “carved out” certain aspects of an ASO bundle – opting to get either benefits or payroll services through an alternate provider, while still getting the ASO provider to handle basic employee administration.
The limitations of an ASO are similar to the limitations of a PEO.
So, we have explained a PEO and an ASO. Finally, we’d like to help you understand the definition of an HRO. It stands for Human Resources Outsourcing, and Achilles Group falls into this category.
Most HROs available on the market today basically provide a “hotline” service where questions about compliance or employee matters are handled over the phone, and a library of tools and resources are made available for client use. At Achilles Group, this is definitely not the case.
The Achilles Group Advantage
At Achilles Group, our Professionally Human approach separates us from all other HROs.
Where a traditional HRO is designed to be a reactive tactical resource, Achilles Group is proactive and reactive, strategic and tactical. Achilles provides greater depth and breadth of HR knowledge and best practices, and because we get to know your culture and unique personality, our solutions are custom-tailored to fit perfectly into your environment.
In addition, many organizations have a need for multiple levels of HR skill sets that are not commonly found in one person. Finding that ideal mix of expertise or making the investment in multiple HR people for most companies can be overwhelming. So, Achilles Group has developed a Fractional HR concept that provides our clients with the ideal mix of expertise without making the investment in multiple HR people.
Our unique methodology is a collaborative approach between your organization and ours that starts with identifying your specific needs. We then determine the percentage of focus on each particular level and type of HR expertise necessary to satisfy your needs.