NetPEO is a brokerage service with a nationwide network of professional employer organizations (PEOs). By partnering with a PEO in our network, business owners can receive services for human resources needs rather than hiring an expensive full-time staff. The usual arrangement through which this is accomplished is known as co-employment, which is different from employee leasing.
The main difference between co-employment and employee leasing is that employee leasing companies supply workers on-site, usually on a temporary basis, to perform the HR work that a client business needs. Under the co-employment arrangement with a PEO, however, the PEO provides the services needed by the client business and becomes a co-employer of the client company’s employees. In other words, the PEO does not supply workers on-site to work directly for the client business temporarily.
In short, the client business owner receives new employees on a temporary basis through employee leasing and receives services from the PEO through co-employment. Although co-employment may sound as if the client business owner loses control of their business, this is not true. The relationship merely means that the PEO can act as an employer to handle sensitive services like payroll and employee benefit information.
The Prevalence of PEOs
Using PEOs through the co-employment arrangement is becoming the business wave of the future due to its many benefits. In fact, the latest data from the National Association of Professional Employer Organizations shows that the more than 900 PEOs across the country serve a clientele that accounts for roughly 15 percent of all businesses with between 10 and 99 employees. Many large corporations are served by PEOs as well, since using a PEO is a great way to save money in the long run. However, many of NetPEO’s partner PEOs specialize in providing HR and accounting services to new and small businesses with as few as five employees.
Benefits of the Co-Employment Relationship
With the HR outsourcing industry growing at a rate faster than the overall American economy, it is obvious that the use of PEOs and co-employment arrangements is becoming the new norm. The reason for this shift away from on-site, full-time staff can be attributed to the many benefits of the co-employment arrangement.
Co-Employment Provides Expertise
The PEOs in NetPEO’s nationwide network boast over two centuries of combined HR industry experience. When teaming up with them, a business owner can rest assured that their company is in the hands of experts who understand issues like local labor laws, federal regulations, risk management, and more. Business owners and employers can reduce stress and rely on the expertise of PEOs with many more knowledgeable employees than may be available via an in-house HR and accounting team.
Co-Employment Creates Unique Opportunities
Since co-employment is such a unique relationship between the PEO and the client business, it allows for greater flexibility and benefits that are otherwise unattainable. For example, PEOs add the client company’s employees to their own employee pool, giving them more leverage for negotiations regarding employee benefits packages and allowing them to reduce the individual costs of benefits by spreading them across a wider employee pool. By using co-employment, an employer may be able to access higher-tier benefits packages than otherwise feasible, attracting better talent and retaining employees for longer.
Co-Employment Lowers Costs
The cost of a PEO is often lower than hiring a full-time human resources staff. Usually, the PEO is paid either as a percentage of monthly payroll or with a flat monthly rate per employee. Either way, this is usually less expensive than providing competitive HR and accounting salaries and employee benefits to HR staff.
Co-Employment Reduces Risk
There are many ways in which hiring a PEO can lower employer liability and reduce a client company’s risk profile. For example, PEOs can help employers draft comprehensive anti-harassment policies, update their safety protocol, handle workers’ compensation claims, ensure compliance with federal regulations, and more. This, in turn, may result in the business having a better chance at partnering with other businesses, attracting customers, and hiring top talent at key positions due to the company’s stability and low risk.
Work on Your Co-Employment Relationship Today
If you are a business owner with between five and 100 employees, your company is in the perfect spot to start working with a PEO. At NetPEO, we operate as a broker to pair you with several PEOs from our network. Once we create a profile of your needs and match you with candidate PEOs, you are free to choose the PEO that best suits your company.
To get more information and start working toward a co-employment agreement with one of our PEOs, simply fill out the form on our contact page and a representative will get back to you soon. Alternatively, you can call us at (678) 376-1212