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Human Resources Outsourcing: Know The Differences Between A PEO & HRO

Successfully running your organization means finding the most effective way to manage your employees’ needs. As your company grows, you may want to consider outsourcing your HR functionality. For many employers, partnering with an outside vendor means choosing between a Human Resources Outsourcing (HRO) provider or a Professional Employer Organizer (PEO). Not sure which one makes most sense for your business? Knowing some key distinctions can help you make the right choice.

PEO Basics – A Professional Employer Organizer essentially hires your employees directly. Acting as a co-employer for tax purposes, a PEO often offers a comprehensive portfolio of capabilities to perform on behalf of your business. Anyone you hire will receive HR benefits, payroll, workers’ comp and other services directly from your chosen PEO.

HRO Basics – Unlike A PEO where you have to form a joint employment partnership, a Human Resources Outsourcing firm is an independent entity that manages specifically outlined business services on behalf of its clients. A reputable team will offer scalable services that can be customized to suit each individual organization’s needs, without having to pay for offerings that aren’t utilized.

The Benefits Of Using An HRO For Your Business Needs

An HRO firm delivers several distinctive advantages over its PEO counterparts. A PEO firm can often feel restrictive and too all-inclusive for business owners looking for customization and flexibility. Additionally, a HRO team assumes a true partnership with business owners. Human Resources Outsourcing companies specialize in keeping their clients’ organizations compliant at all times. An effective HRO will offer company advisors and extensive resources to ensure their partners understand how to meet required standards with employees throughout all levels of the organization.

Most importantly, contracting with a PEO means your corporate name and employees fall under their company, potentially hindering your brand recognition, exposure, and loyalty. An HRO remains a separate vendor at all times. As a true partner, an HRO will expand its services offerings to your business as you need it, without hindering brand growth.

For more information on partnering with an HRO team, contact The Payroll Company today.

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