If you run a business and are considering for expanding your operation, you may be curious about what options are available to help you. You may have heard about staffing agencies and PEOs but aren’t sure if they are the same thing. A staffing agency is a different sort of entity than a PEO, which is also known as a professional employer organization. Which choice is right for your company will depend on your business’s needs.
When your business needs call for a PEO, turn to NetPEO. Our PEO brokers are trained to find the right PEO to partner with your business. You can reach out to us by calling (678) 376-1212 or completing the forms on the right of this page.
A staffing agency is an organization that recruits employees to match with client businesses. Staffing agencies may conduct interviews and other assessments to determine an employee’s skill set. When an opening exists for an employee working with a staffing agency, they may be sent to work at the client’s business site for a temporary period.
While a worker is employed with a staffing agency, even while they work on a client business’s site, they are employees of the staffing agency. Typically, there is a set term for the employees to work at the client site. In some cases, an arrangement may exist for the client company to hire the employee as a full-time worker after a set amount of time temping on behalf of the staffing agency.
A PEO is an HR and accounting outsourcing organization. PEOs partner with client businesses to take care of HR and accounting functions that would otherwise be handled by an in-house employee or department. A PEO might help a business by:
- Administering payroll and benefits
- Creating an employee self-service site or employee handbooks
- Managing employee liability claims, including workers’ compensation
- Handling compliance with state and federal labor laws
The specific functions a PEO helps the client business with is set out in its client service agreement (CSA). As part of the partnering process, both the PEO and the client business become employers of record for the client’s employees. In legal terms, employees working under a co-employment agreement are employed both by the client business and the PEO.
Why PEOs Can Seem Similar to a Staffing Agency
PEOs and staffing agencies both alter the employer-employee relationship from a traditional relationship. Using either sort of service adds an extra layer to any employment decisions you may make.
PEOs can also help your business when it’s time to expand. When you’re ready to fill a new role, you can work with the HR professionals at your PEO partner to create a job listing and develop a strategy for searching for candidates. You can also allow your PEO partner to handle the processing of applications and even the initial phone screenings of candidates. However, you can have the final say on who becomes an employee for your business when working with a PEO.
Determining if You Should Use a Staffing Agency or a PEO
If you’re unsure of whether to reach out to a staffing agency or a PEO, think about your business needs.
Are you in need of a temporary worker to fill a vacancy that will be filled when an employee returns from medical leave? Do you have a sudden project that you need a few extra hands to complete on time? A staffing agency may be a better option in those instances.
If you’re interested in long-term solutions that include recruiting employees, a PEO may be the better option for your business. Say you need someone to fill a permanent role and you’re already struggling with payroll for your existing employees. The cost of hiring a dedicated HR staff member to help might be too much for your budget, but a PEO is a cost-effective alternative.
NetPEO’s Brokers Can Help You Understand Your Options
The National Association of Professional Employer Organizations (NAPEO) reports that there are over 900 PEOs currently operating in the U.S. today. Not all PEOs operate in every state and not all will fit your business needs. Finding PEOs operating in your state and vetting them to determine if they have the services you need at prices that fit your budget can be stressful.NetPEO’s brokers are here to reduce that stress. After conducting a thorough interview with you to assess your company’s needs, our brokers handle the search process on your behalf. Our brokers carefully select a list of potential partners from our trusted network. We’ll help you arrange meetings with your choice of PEOs and we’ll even help you understand and negotiate the terms of your client service agreement.
If you’re ready to talk to a PEO broker about your business needs, call (678) 376-1212 today!