Your small business deserves to have the help and support it needs, and one of the best ways to get that is through outside organizations who can help fill in the gaps for you. The majority of small businesses don’t have HR departments, for example, because they’re simply not large enough companies to accommodate HR professionals on a full-time basis. Fortunately, with a PEO or ASO your company can streamline its HR services.
Professional Employer Organization
A professional employer organization (PEO) is designed to be a one-stop shop for all your HR needs. These organizations typically work with small and medium-sized businesses, because most of these companies are too small to have full-time HR departments. It’s just not cost-effective, and in some cases it’s completely not affordable at all.
However, when you bring in a PEO you need to make sure you understand what you’re getting and what’s required of your company. Then, you can make the right decision for your administrative needs and focus your attention on other areas where your business needs your time and talents. Because of the way these organizations have a degree of control over your employees, they aren’t always right for every business.
Administrative Services Organization
In contrast to a PEO, an ASO, or administrative services organization, provides similar support that’s generally not as comprehensive. They don’t have as much employee control, for example, and they also usually don’t offer as many services. That can be good or bad, depending on what your company is specifically looking for.
Some small businesses want to retain as much control over their finances and other details as possible, while others are happy to turn that over to someone else. You’re the only one who can decide whether more fully streamlining your HR services is the best choice, or whether you’d rather keep some things for yourself.
There Are Pros and Cons of Each One
Both PEOs and ASOs have pros and cons. Your specific small business, the industry you’re in, and how much knowledge you have of the financial, legal, and compliance requirements of that industry all matter when you’re choosing what kind of HR help you need and want. A mid-sized business where the owner has a lot of experience in the field might be very different from a small business where the owner is just starting out. Either way, though, you want to make sure you’re choosing the best HR options for your needs.
Understanding the Differences is Key
The main difference between PEO and ASO is that your employees will become employees of the PEO, but not of the ASO. In other words, a PEO will act as co-employer, where an ASO will be a company that works for you. That’s not necessarily negative or positive, though, and it depends on what you’re looking for. A PEO will also generally cost more, but you’ll be getting a larger and more comprehensive range of services. If you want to retain your workers as official employees of your company, though, an ASO might be a better option.
Streamlined HR Services Make Business Growth Easier
It’s easier to grow and develop your business when you have streamlined HR services you can rely on. How much of those services you want to turn over to another company is a personal decision, and will likely depend on several different factors. Before you make that choice, though, spend some time considering what a PEO and an ASO can offer you. Then, you can make an informed choice and feel confident that you’re doing what’s right for your company and its future.