So, in my post last week, I noted that one of the speakers at a recent panel I was on had suggested using a PEO for startups.
And for some businesses, it may be worth the cost.
But the truth, of course, is that for many employers, PEOs aren’t the best choice. They may be an unnecessary cost and don’t solve the issues they really need fixing.
PEOs can fail to file taxes properly, for example. PEOs won’t assume liability if you misclassify an employee either. And a PEO can impose restrictions for risks that you would otherwise feel comfortable taking.
But perhaps most of all, PEOs can feel impersonal. Sure, they are a co-employer, but there isn’t a PEO staff person on site — one that can provide the personal touch of an HR person.
Does that mean that you ought to hire an in-house human resources person?
Not necessarily. There are several great local options and I’ve interviewed a few previously on this blog. This is where an outside HR consultant may work best.
Let me highlight one such firm just by way of example. HR Innovations, LLC (led by the indefatigable Myrna Sessa), is actually designed exclusively for small to mid-size businesses. Her consultants provide outsourced, yet readily accessible, HR services without the size or cost of a PEO.
An outsourced HR consultant from a company like HR Innovations can be available as needed and visit your site for a day or two (as needed) to take care of the hands-on work that may be involved. But working remotely, as they can do, keeps costs down low.
Plus, they are much more likely to be familiar with Connecticut and New York laws that have been changing on a yearly basis.
I’ve worked with Myrna and her team for a number of years; if you haven’t explored this option for your small business, it just may be the right fit for your company.
Of course, there are many others, such as The Human Resource Consortium out there that I work with too, particularly for larger companies or non-profits. Each one has their own strengths for specific businesses and industries.
If you’re interested in using one, here are the best tips:
- Do your homework.
- Ask for references.
- Find the best fit for your company.
- Negotiate pricing and services