¶ Intro / Opening
Have you ever considered partnering with a PEO to support your business? Explore the benefits, solutions, and trusted advice that a PEO partner can provide. Welcome to HRPreneur. I'm Jim Duffy. From Main Street to Your Street, the HRPreneur Podcast is centered around helping small businesses like yours gain the knowledge you seek from HR, payroll, and hiring to time employment taxes, employee benefits, and business insurance.
Today we're talking about Professional Employer Organizations, or you may hear them referred to as PEOs. What are they? Why should a small business consider outsourcing their human resources to a PEO? How do they work and what are the benefits to your small business? We're joined by Dr. Carmen Armstrong, ADP TotalSource Client Relations Executive, and Dena Grammas ADP, Totalsource HR Business Partner. Welcome to the program, both of you.
Thank you, Jim. Happy to be here.
Many of our listeners may not be familiar with the professional employer organization or a PEO as we will be calling it throughout this podcast. Carmen, can you start us off please and explain what a PEO is?
Sure, Jim.
¶ What is a PEO?
A Professional Employer Organization or PEO is a business partnership or co-employment relationship with a business that allows the PEO to perform various employee administration tasks such as payroll and employee benefits administration, and provide human resources support to.
Carmen, thank you for that.
¶ Why would a small business consider a PEO?
Can you explain why would a small business think about outsourcing their HR to a PEO?
Well, in general, small to mid-size businesses consider partnering with a PEO to support their organizational infrastructure. Whether this means supplementing in-house HR support, helping the business grow in employee headcount, or meeting financial goals and objectives.
A small business joins the PEO relationship to allow executive decision makers to focus on core business operations while gaining expert HR guidance, employer of choice, benefits offerings, and assistance with mitigating employee employment related compliance risk. Owners also look to outsource complex HR functions like payroll, benefits administration, and employment related compliance management.
Carmen, thank you. Uh, Dena, I have a question for you, if I may.
¶ How does a PEO solve for small business challenges?
How does a PEO solve for small business challenges?
Small businesses often struggle with the complexity of HR from compliance with ever-changing employment and labor laws to handling employee relations and managing employee. A PEO simplifies this by acting as a co-employer providing expertise, infrastructure, and economies of scale that a small business might not have on its own.
So, Dena, uh, we introduced you as an HR business partner and that you work closely with the businesses that are on a PEO.
¶ What is an HR Business Partner?
Can you please explain what an HR business partner is and what you do typically to support a small business on a PEO?
An HR business partner, (also known as an HRBP) is a strategic advisor who helps business owners navigate the complexities of HR employment related compliance and workforce management beyond a traditional HR generalist, an HRBP works proactively to align a company's HR strategies with their business goals. I'm at my best when I'm an extension of the leadership team providing my expertise in areas like multi-state employment related compliance, employee relations, leadership coaching.
Compensation, employee benefits and HR data analytics. I work with business owners to prevent issues before they arise and create strategies that help support growth. I'll make you aware of opportunities and how to navigate employment related blind spots. We bring a fresh perspective to your business and also offer strategic insights and best practices.
Many of us, for example, have decades of experience in human resources, but each day brings us opportunities to connect with our clients to help with their day-to-day needs, but we also align with their long-term goals. Some clients join us to support their growth strategy. I personally support clients with locations in many states, and as their businesses expand, they need to know their practices align with local, state, and federal employment related requirements.
Employee relations and HR consultations are a big part of my role because employers want the assurances that they're taking the appropriate steps to address things like performance issues or maybe to understand how to best support an employee who needs a disability accommodation. I also reach out to my clients as employment related legislation changes, or even if I see something in the news or a trade publication that might apply to their industry or their goals.
Dena, thank you for that background. You clearly cover a lot of ground.
¶ How HR Business Partners help clients with challenges
Uh, can you please share a specific example of how you have approached, say, a, a client challenge?
I just helped a business that operates in 16 states ensure compliance with multiple state paid leave laws, differing PTO accrual payout requirements and and helped them navigate the concerns of unlimited PTO policies. They also had a local paid leave ordinance to consider, just to keep things interesting. Another business owner came to me about an ADA accommodation request from an employee with a medical condition. The employee requested work from home as the accommodation.
I guided them through the interactive process by explaining that the ADA doesn't require automatic approval of these types of requests, but does require a good faith effort to find an effective solution. Through several discussions, we determined her essential duties could be performed remotely with only a few minor adjustments. By adding scheduled check-ins and communicating clear performance expectations, the owner was relieved.
We could find a way to structure accommodations that supported the employee's wellbeing while maintaining accountability and productivity.
Dena, just a bit ago, you talked about this business that you were supporting was operating in 16 states. That certainly must bring a lot of complexity.
¶ How PEOs help clients navigate complexity
Can you tell us a little bit more about what that would look like and how you helped the business navigate that complexity?
Sure. Imagine being a small business expanding into multiple states, each with their own employment laws, employment tax requirements, and paid leave policies. With a PEO, a business owner can focus on growth because they know they have a team of HR experts who can assist with employment related compliance and provide best practices to help reduce risk. For example, attracting and retaining top talent.
Many businesses can't offer Fortune 500 health benefits on their own, but a PEO gives small businesses and their employees access to technology benefits and retirement plans at competitive rates. I've found that navigating state paid leave laws have been challenging for employers who have a multi-state presence and feel uncertain about how the laws apply to them and their employees. Business may feel confident in knowing their own state laws, but as they grow their business.
They find themselves in unfamiliar territory, quite literally, and don't know what they don't know yet. We stay on top of those regulations so our clients can focus on their business and their employees.
Dena, thank you for explaining that truly a wealth of expert information. Can you give us some examples for our listeners of how you've guided your clients on these kind of specific topics?
I've recently coached clients through complicated employee relations issues like managing return to office policies, mandatory employee assistance referrals, and developing competitive paid family leave programs. I'm currently working with a client who set an ambitious goal for their business. They want to achieve a local media's ranking of top places to work. It is a very ambitious, multi-year goal, and they are just getting started.
Our services can help them achieve the employee engagement they need which is one of the components they need to achieve their goal. Its going to take dedication but it’s going to be fun partnering.
Dena, many thanks for all of that information and additional context. Very, very helpful in explaining what the PEO is in your role.
¶ The PEO specialists that support clients
Uh, if I may, Carmen, uh, earlier you talked about a team of HR specialists that partner with a PEO. Can you tell us a bit more about these experts?
Yes. Uh, typically with a PEO you get a full team of HR specialists that cover everything from payroll to employee benefit and everything in between. Our team of specialists include the HR business partner who serves as the account manager and provides HR guidance, payroll business partner who supports the client's payroll processing needs. A risk and safety specialist that supports workplace safety and assist with compliance.
A team of benefits services specialists who help with employee benefits administration and assist with compliance businesses. Also receive support with employer tax filing and reporting state unemployment Claims, compliant employee handbooks and talent management services.
Carmen, thank you for that information. Uh, Dena, a quick question for you.
¶ How a client's employees benefit from a PEO
So we haven't touched on the employees just yet. You know, of course these business owners are making decisions that would impact their employees. Can you tell me and our listeners about how they benefit when their business owner decides to partner with a PEO?
Employees are thrilled when their employer joins a PEO. Even if they don't know what a PEO is, they have access to Fortune 500 health benefits and support access to wellness programs and more employees and their families enjoy our money saving Perks at Work discount program and our confidential employee assistance program when they need a little extra help through difficult times.
Partnering with a PEO, frees the employer of administrative employer tasks, to allow them to focus on business, their business. Another benefit we shouldn't overlook is that employers receive a designated risk and safety specialist who keeps employees safe with personalized safety programs designed for the business' work site.
So it sounds like you really see it all as an HR business partner. Uh, let's switch gears here for a moment and let's talk about success.
¶ Defining success as an HRBP
How do you define success as an HRBP? What do you enjoy most about the role?
I see success as an HRBP come down to making an impact on both the business and its employees. I know I'm successful when the business owner sees me, not just as their HR contact, but as a trusted advisor that helps them navigate challenges, make informed decisions, and ultimately grow their business. Sometimes I'm just their sounding board as they talk through an employment-related issue. It's rewarding when a business owner truly partners with me.
Not seeing HR as a speed bump in the road, but as a tool for growth. When they trust me, I can proactively help them structure their business, assist with retaining top talent, and create a great work environment. At the end of the day, my success is measured by the success of the companies I support. Seeing a business grow, watching its leaders flourish, and knowing that I played a role in making work better. I enjoy most is the variety and the strategic nature of the work.
Each day is different problem solving, relationship building strategy.
Dena, thank you for all that information. That's excellent context. Uh, Carmen, if I may please turn to you, uh, as we begin to wrap up.
¶ Evaluating if your business is right for a PEO
Uh, we have learned some great information about PEOs today, and, uh, the question I have is about, um, what should a business ask themselves as they evaluate and consider using a PEO? Are there certain, for example, industries or businesses of a certain size that are better suited for a PEO than others?
I think this question goes back to the business's infrastructure, the business strategy and goals. Businesses considering and evaluating PEOs have assessed what they need to do with their business to be competitive and achieved sustainable success. They have identified business objectives and goals and need help to maintain critical areas of their business, like HR, payroll, and employee benefits. They can focus on effectively implementing their overall business strategy.
The beauty of a PEO is that the PEO model is well suited for businesses in most industries. We have clients who are nonprofits, governmental contractors, to warehousing and professional services.
Carmen, thank you for that. Uh, this brings us to the end of the episode. Uh, thank you again, Carmen and Dena for joining us. We have really learned a lot about PEOs and in particular about how the both of you really partner closely with these business clients to help them navigate the many employment related challenges they face every day.
Presented by ADP, HRPreneur focuses on the entrepreneurs and business drivers who are shaping the growth of their companies and positively impacting the lives of their employees. With each episode, we'll bring the experts to you, answer your questions, and help you think beyond today so you can discover more success tomorrow. As always, thanks for listening to HRPreneur.