Irvine Spectrum News - August 9-13, 1999

Is There a PEO in Your Future?

By Louis Packard, Administaff

When you dreamed of running your own business, you probably never thought much about ADA, EPPA, USERRA or COBRA. No, these are not three people and a snake. They are among three dozen or so federal regulations – in addition to common law, case law, and state and local laws – that business owners need to comply with in their role as employer.
Unfortunately, complying with complex personnel-related regulations is just one of the many administrative challenges confronting today’s business owners. They must also deal with such issues as payroll taxes, workers’ compensation, employee benefits packages, training, recruitment…the list goes on and on.

Consequently, a growing number of entrepreneurs have introduced their businesses to another acronym: PEO, which stands for Professional Employer Organization. By serving as an off-site human resources department, PEOs provide welcome relief to the frustration many small-business owners experience when administrative hassles snarl their ability to focus on the core business, serve customers and grow the company.

Another important benefit of PEOs is that they can help level the playing field with larger companies in the employee benefits arena.

By using the combined purchasing power of thousands of employees, PEOs can provide their clients with top-notch benefits packages that are competitive with those of Fortune 500 companies. This advantage is especially helpful in today’s tight labor market, where it is becoming increasingly difficult to find and retain quality workers.

In addition to administrative relief and improved benefits, top-of-the-line PEOs also provide entrepreneurs with other vital employment resources like productivity-based training courses in time management, communication skills, customer service, team building and total quality management. The result is win-win: employees value the opportunity to grow professionally while the business benefits from increased productivity.

Importantly, PEOs also offer business owners the opportunity to reduce their employment liability exposure. With a PEO, a client company can transfer many of its employment liabilities to the PEO. Other liabilities are shared.

And with those that are left, the PEO can provide resources like safety consultants, legal experts and human resource specialists to help provide the back-up needed to further reduce a client company’s exposure.

Answer Financial Inc., which operates the Insurance Answer Center, an Internet-based insurance agency, is one local company currently using a PEO.

"We expect to reach 300 employees by year-end 1999," said Alan Snyder, chief executive officer of Answer Financial Inc. "In order to help us focus on the growth and development of our business, we wanted the support of a company with significant depth in its human resources functions. Administaff delivers a rich range of cost-effective human resource services."

Finally, what about the three acronyms and the snake? ADA is the Americans with Disabilities Act; EPPA, Employee Polygraph Protection Act; USERRA, Uniformed Service Employment and Reemployment Act; and COBRA, Consolidated Omnibus Budget Reconciliation Act. Snake or not, a full-service PEO can help small business owners handle these and numerous other administrative responsibilities both effectively and efficiently.

Louis Packard is the district manager for the Newport Beach office of Administaff, one of the nation’s leading professional employer organizations. For more information about Administaff, contact the nearest office at 800-465-3800 or visit the company’s website at http://www.administaff.com.

Reprinted with permission of The Irvine Spectrum News