What is a PEO and how does it work?
What is a PEO and how does it work?
A PEO stands for a Professional Employer Organization. It exists as a separate, stand-alone organization focused exclusively on managing its clients’ human resource-related functions, including benefits administration, regulatory compliance, workers’ compensation, payroll, taxes, and similar practice areas. It is more than just an extension of your Human Resources department.
A PEO will assume the role of “employer of record” for a company’s employees, taking on the responsibility of administering most or all of the administrative tasks – as well as a fair measure of the risk associated with maintaining a workforce.
In recent years, PEOs have staked out a claim to a growing portion of the HR field, supplementing or eclipsing in-house Human Resources departments in many small to mid-sized companies. Even as the popularity of PEOs have increased, many business owners and C-suite decision makers do not understand how their organizations can benefit from these services. Once they find out more about a Professional Employer Organization, they quickly come to understand that they are fundamentally changing the way American businesses manage interactions between employers and employees.
What is the benefit of using a PEO?
A PEO shifts some essential functions and responsibilities from employees to an experienced, external third party that works with your team. The professional employer organization will assume the role of “employer of record” for a company’s employees, taking on the responsibility of administering most or all of the administrative tasks – as well as a fair measure of the risk – associated with maintaining a workforce.
By engaging with a PEO, client businesses gain a number of significant operational and competitive advantages:
- The ability to reallocate both attention and resources from HR functions to core areas of interest and expertise – the making and selling of the company’s product or service.
- A measure of insulation and/or indemnification.
- The streamlining of human resource functions placed under professional administration.
- The ability to leverage economies of scale in securing necessary benefit and insurance programs.
- Improved adoption of HR best practices under professional administration.
Is a PEO a staffing agency?
Most PEOs are not staffing agencies, which essentially lease employees to other businesses and remain the sole employer for those workers. PEOs do not generally supply businesses with staff, but instead assume certain responsibilities that make them co-employers with their partner companies.
Is a PEO the same thing as HR outsourcing?
Human resources outsourcing (HRO) is not the same as a PEO, although some PEOs (like Trion Solutions) can meet both needs. A PEO acts as a co-employer, whereas an HRO works with processes that are already established by your organization. PEOs and HROs fulfill different roles as an HR provider.
Working with a PEO can benefit businesses of any size. A PEO is a good choice for organizations looking for a turn-key solution that reduces overall administrative burden in human resources as well as limits your organization’s liability. PEOs offer a more inclusive solution and HROs often provide individual solutions à la carte
What functions does a PEO not do?
While the specific functions of individual PEOs vary from one provider to the next, there are some general functions which you should not expect a PEO to do. Those include:
- Influence or define your company culture
- Hire and fire your employees
- Set workers’ schedules or pay rates
- Define your business goals
- Participate in marketing your products or business
Is Trion a PEO?
Michigan-based Trion Solutions is among the nation’s Top 10 Professional Employer Organizations (PEOs). Trion relieves the stress and burden of payroll and other HR-related functions for companies – from small to large – so they can remain focused on their core business.Trion’s size provides client employees access to better benefits and HR services available usually to only large corporations – all while taking employer risk and regulatory strain off of partner organizations.
Can my business benefit from a PEO?
The growing popularity of the PEO model is driven to a great degree by the increasing challenges and stressors facing small to medium-sized businesses. An increasingly technology-driven, global marketplace heightens competition and shrinks margins, even as increased regulatory and legal risks impose additional complexity and costs upon HR departments and practitioners. A PEO can deflect risk, contain costs, ensure consistency and predictability in practices, and effectively address complex taxation, insurance, and regulatory issues becomes increasingly valuable to companies operating within this challenging environment.
As your business evolves, chances are that a PEO model can support growth and operational efficiencies for companies in a wide range of industries. The experts working on your behalf as part of the professional employer organization can also deflect risk, contain costs, and ensure consistency and predictability in practices to support the completion of taxes, insurance decisions and other regulatory issues.
See if a PEO would be a value-added service for you by contacting Trion Solutions to speak to one of our experts.
Observe National Ladder Safety Month With These Tips
March is National Ladder Safety Month, an opportunity to review your policies, training, and equipment.
Whether you’re a small service business with a couple of step stools around for lightbulb changes or a large contractor that uses complex climbing equipment, you’ll want to read on for the latest on ladders.
According to OSHA, falls from portable ladders (step-, straight, combination, and extension) are one of the leading causes of occupational fatalities and injuries. Here’s a basic overview of what’s required for all ladders.
- Maintain ladders free of oil, grease, and other slip hazards.
- Do not load ladders beyond their maximum intended load or rated capacity.
- User ladders only for their designed purpose.
- Use ladders only on stable and level surfaces unless secured to prevent accidental movement.
- Do not use ladders on slippery surfaces unless secured or provided with slip-resistant feet.
- Secure ladders placed in areas such as doorways or passageways or where they can be displaced by workplace activities or traffic. Or, use a barricade to keep traffic or activity away from the ladder.
- Keep areas clear around the top and bottom of ladders.
- Do not move, shift, or extend ladders while they are in use.
- Use ladders equipped with nonconductive side rails if the worker or the ladder could contact exposed, energized electrical equipment.
- Face the ladder when moving up or down, and maintain three points of contact—for example, two hands and one foot or two feet and one hand—with the steps, rungs, and/or side rails of the ladder at all times.
- Use at least one hand to grasp the ladder when climbing.
- Do not carry objects or loads that could cause loss of balance and falling.
Additional OSHA requirements:
- Wooden ladders must not be coated with any opaque covering, except for identification or warning labels, which must be placed only on one face of a side rail.
- A competent person must inspect ladders for visual defects periodically and after any incident that could affect safety.
- Do not use single-rail ladders.
- Never use the top or top step of a stepladder as a step.
- Portable ladders with structural defects must immediately be marked as defective or tagged with “Do Not Use” or similar wording and taken out of service until they are repaired.
- Fixed ladders with structural defects must be taken out of service until they are repaired.
- The minimum clear distance between side rails for all portable ladders must be 11.5 inches.
- Rungs and steps of portable metal ladders must be corrugated, dimpled, coated, or treated to minimize slipping.
- If the total length of the climb on a fixed ladder is 24 ft or greater, the ladders must be equipped with ladder safety devices, self-retracting lifelines, and rest platforms, or a cage or well with multiple ladder sections.
- Each step or rung of a fixed ladder must be able to support a load of at least 250 pounds.
Dodging the Hazards of Out-Of-State Expansion
For many successful local businesses, it’s an idea that seems enormously appealing: Build your company by establishing a beachhead in neighboring states. It makes perfect sense on the face of it: If a product or service is a market success in Michigan, for example, it stands to reason that it will fare well in Indiana or Ohio. And there’s seldom a reason why a restaurant chain that’s popular in Florida would fail to gain traction in Georgia.
It makes perfect logical sense – but business is not always logical, particularly not when government regulation is involved. While market conditions may be nearly identical from one state to the next, regulatory and taxation environments usually are not – and those differences can go a long way towards torpedoing the success of an expansion effort, often almost as soon as it begins.
As is often the case when it comes to the hazards facing growing businesses, the biggest problems are caused by the issues you don’t know exist and the hazards you can’t see coming. Unless your company is already a major corporation with an established presence —and on-the-ground expertise—in other states, it is a virtual impossibility that you’ll be fully aware of all of the potentially problematic differences between your new place of business and your home base. That’s a problem.
Taxation and regulation are the first and most obvious pitfalls. Tax and regulatory codes naturally differ from one state to the next; each state has its own centuries-long index of whys and wherefores that have come to constitute its current-day regulatory and taxation environment. In virtually all cases, these are the cumulative end product of decades of capricious governance: Local and state officials, acting in self-interest or in the interest of special interests, enact a welter of tax and regulatory burdens that remain on the books for years and which usually multiply their reach and impact exponentially over time, creating an impenetrable tangle for businesses to wade through. Income tax, sales tax, property tax, workers’ comp, health and safety, environmental issues – the list of distinct areas potentially affecting a would-be new business are endless.
These are sizeable problems in and of themselves – but they are not the only consideration. Laws and regulations don’t exist in a vacuum; rather, they function within the unique local political, legal and social framework. In practical terms, Ohio doesn’t function identically to Michigan, nor Atlanta to Orlando. Each state, county and municipality is subject to its own localized customs, power structures, and idiosyncrasies. Even when a company operates fully within the letter of the law, capricious local officials and arcane provincial practices can draw new businesses into the regulatory quicksand.
Knowing both what and who you need to know to sidestep these pitfalls is essential – and that’s where Trion has proven its worth to many of our growing clients. As an established national PEO with a solid on-the-ground presence and a wealth of localized institutional expertise, we’re able to navigate the payroll tax and regulatory minefields wherever there’s business to be done – and we shield our clients from costly, time-consuming entanglements with local compliance authorities. Clients usually come to us to handle the routine daily hassles that they know and expect, but we often deliver much of our value in dealing with the ones they don’t expect. As many of them will tell you, that can make a big difference – often between success and failure where out-of-state expansions are concerned.
Doing Workers’ Comp Insurance Right
Recently, Trion Solutions renewed our agreements with 2 major insurance companies to continue obtaining Workers’ Compensation insurance through their firms. In both cases, it marks the third successive annual renewal.
That may not sound like a big deal – but it is. Here’s why.
If you’ve been in business for any length of time, you already know about the risk and expense that Workers’ Compensation insurance and claims can pose to your company. Unless you have incredibly deep pockets, claims mean trouble – usually in the form of skyrocketing premiums, and sometimes the inability to obtain affordable coverage, or even any coverage at all.
Considering that the cost of almost all types of insurance is steadily and dramatically rising, it is especially striking that Workers’ Comp insurance remains a dominant concern among business owners and management. Health care, liability, property and other insurance rates have gone through the roof for many businesses, but none of these pose the direct existential threat that workers’ comp often entails. When it comes to worker’s comp, companies need predictability, stability, and a reasonable cost structure—not to mention an appropriate level of coverage. More and more often, they’re finding that these aren’t easy to come by, even when they’re working with a PEO.
Unfortunately, most PEOs haven’t been successful in truly stabilizing the insurance environment for their clients. As with other companies, the volatility of the workers’ comp landscape finds many PEOs scrambling every year to secure affordable, reliable coverage. Even when they find it, switching between providers causes confusion and disruption, contributing nothing positive to their clients’ comfort levels.
Trion Solutions is proud to be an exception to this rule. Thanks in large measure to the best practices processes we’ve put into place, our strong track record in effective Workers’ Compensation management, and the leverage afforded to us by our size, we have been able to forge enduring, sustainable relationships with our insurance providers. These days, it’s pretty much unheard of for a company of our type to maintain positive successive multi-year relationships with insurers, but once again we’ve managed to pull it off.
So far as our clients are concerned, that means a lot. It means that they will continue to enjoy the same high level of protection, the same manageable costs, and the same processes that they’ve gotten used to. It means that for another year, Workers’ Compensation insurance is something they don’t have to think about or worry about, and they can focus on other, more productive aspects of their businesses. And they can be confident in knowing that any concerns are being capably, effectively, professionally handled by people who know what they’re doing and who can be counted on to act in their interest.
We’re glad to be working once again with some of the most reputable, solid companies in the Workers’ Comp insurance industry, and we are pleased to be able to say that at Trion, we’ve built the strong, enduring relationships it takes to do it right. We’re betting that our clients are pretty happy about that too.