Insperity Hr Outsourcing A Step By Guide To Professional Employer Organizations

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HR Outsourcing: A Step-by-Step Guide to

Overview Get the expertise and help you need to focus entirely on
running and growing your business. This guide walks you through the
process of hiring a PEO and helps you determine if it’s right for you.


Table of Contents
The Power of PEOs
How a PEO Can Benefit Your Business
How PEOs Work
Common Misconceptions
Finding the Right Fit

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Companies of all sizes struggle with growth. But as a small business, to stay competitive, you’re constantly forced
to do more with less.
Not only do small businesses have fewer resources to deal with daily HR responsibilities, they also face greater
regulatory burdens than their larger competitors.
The good news is, despite your size, you can still come out ahead of the pack. Outsourcing even a portion of your
HR tasks can afford you the freedom to focus on core activities that will help you grow your business.
Did You Know?

Small businesses
that use a PEO
have an employment growth rate that
is nearly 10 percent higher than small
businesses that don’t.
National Association of Professional Employer
Organizations (NAPEO)

HR outsourcing vs. PEO
HR outsourcing can take many forms, from basic payroll processing and timekeeping to complex regulatory
compliance and benefits administration. The most comprehensive solution is a Professional Employer
Organization (PEO), which offers a full slate of HR services to its clients.
A PEO provides your company with access to these key resources:
• Better health, retirement and workers’ compensation benefits
• Professionals well-versed in all aspects of employee recruitment, retention and management
• Reduced accounting and payroll costs
• Comprehensive employer liability management that lessens employment-related risk
• Relief from administrative duties that drain your valuable time and attention
What you’ll get in this guide
Discover how partnering with a PEO can help your business gain a competitive edge despite its size. In this
guide, you’ll learn how to gauge your needs, vet service providers and quantify results.

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The National Association of Professional
Employer Organizations (NAPEO) estimates that
about 700 PEOs are in operation today in the
U.S., covering 2-3 million American workers.

The Power of PEOs
Unlike other types of HR outsourcing companies that provide only one or two specific services, PEOs can handle
the bulk of your business’s HR tasks. As a PEO client, you won’t have to devote your valuable time to tracking
payroll or negotiating rates with benefits providers, nor will you have to hire additional staff to manage these
responsibilities for you.

How a PEO Can Benefit Your Business
Outsourcing all or even a portion of your HR duties can provide the following:
1. Access to comprehensive and affordable benefits
A PEO typically provides benefits under a sponsored plan and can offer a wider range of services to your staff
at a much better price, including health and retirement 401(k) benefits.
2. R
 elief from general HR tasks
Outsourcing administrative duties to a group that specializes in HR ensures that important issues will be
handled correctly, including:
• Payroll administration
• Government compliance
• Employee benefits
• Employer liability management
3. Reduced payroll and administration burdens
By contracting with a PEO, you stand to benefit from a decrease in the costs associated with payroll
processing and maintaining wage records. You’ll also receive reliable assistance with tasks such as:
• Payroll processing
• Tax reporting and deposits
• Paycheck/paystub preparation and delivery
• Garnishments

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4. Assistance with federal and state employment laws and regulations
A PEO should be able to:
 dminister payroll in accordance with federal and state laws, and
properly report federal, state and local tax
• Administer unemployment claims
• Respond to employment verifications
 omply with federal laws affecting PEO-sponsored
benefits (e.g., COBRA, HIPAA and ERISA)
• Provide guidance with OSHA
• Assist with health care reform compliance

The number of government
statutes and regulations has
grown significantly since 1980.

New Government Statutes and Regulations

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Did You Know?

250,000 businesses
use PEOs
National Association of Professional
Employer Organizations (NAPEO)

5. Reduced liability
PEOs have a vested interest in keeping your business compliant and will
assist you with related tasks, including:
• Employee handbooks
• Workers’ compensation claims
• Agency interface
6. A
 ccess to seasoned HR professionals
PEOs comprise knowledgeable professionals who specialize
in HR and can be trusted to handle issues in a timely and thorough manner, including:
• Employee relations support
• Employee liability awareness training
• EEOC claim investigation, reporting and mediation
7. Freedom to focus on core business issues
Your time is valuable and better spent attending to tasks related to growth and profitability.

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How PEOs Work
How Co-Employment Works

PEOs exist through a relationship called co-employment. Simply put, your employees work for both your
company and the PEO. You maintain control of all business decisions and operations while the PEO manages all
personnel-related functions (payroll, benefits, HR, workers’ compensation, etc.).
The client employer maintains control of all business decisions and operations while the co-employer manages
all employee-related aspects of business operation (wage and benefits administration, I-9s, W-2s, etc.).


Above all, it is important to note that PEOs do not supply a workforce; they supply HR
services and benefits to your company and its existing workforce.

Common Misconceptions
Although the PEO industry is more than 30 years old, some common misconceptions persist.
Loss of control
PEOs provide access to seasoned HR professionals, whose guidance and advice you can solicit when you need
assistance. They manage the employee-related aspects of your company, but you maintain control of all
business and operational decisions.
The client employer maintains control of all
business decisions and operations while the
co-employer manages all employee-related
aspects of business operation (wage and
benefits administration, I-9s, W-2s, etc.).

Worry that employees may not embrace the relationship
There is minimal, if any, disruption to employees when you work with a PEO. They will see that they are being
paid by the PEO and not your company, but will likely appreciate the greater depth and breadth of benefits
offered as a result.
Worry that existing HR staff will be terminated
PEOs often align with your company’s existing HR department to provide much-needed expertise. External
resources can prove invaluable when you are faced with high-risk HR situations.

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About Insperity
Year Established


Insperity has been publicly traded on the
New York Stock Exchange since 1997.

Finding the Right Fit
If you’ve decided to partner with a PEO, here are some points to consider before making your selection:
1. The financial strength and security of the candidate company
Verify that each company’s financial statements are independently audited
by a CPA; their risk management practices have been independently
certified; and their operational, financial and ethical practices have been
independently accredited.

Serves more than 100,000 businesses with
over 2 million employees.

2. Their commitment to customer service
Meet the people who will be serving you. Some companies charge extra to
speak with a live representative, while others use call centers and expect
you to speak with a different person each time you need help. A dedicated
service team can be priceless.

2013 Revenues

3. The breadth of their benefits plan options
A PEO whose health plan centers around a state-specific provider won’t
work if you have employees in other states or plan to expand your business.

Consistently named one of the Best Places to
Work in America. Named 2013 Mid-Market
Company of the Year by CEO Connection.

4. Their service and cost structure
Many variables affect the cost of partnering with a PEO. Your company’s
size, overall workers’ compensation risk and the benefits package you
would like to offer will all play a part. Most PEOs bill based on a percentage
of gross payroll or total number of employees and are able to offer
considerable savings because of economies of scale.

Insperity operates in 57 offices throughout
the United States.

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Finding the Right Fit (Continued)
Did You Know?

For about the same amount of money you’ll
spend on small-group coverage alone, here’s
what you can get with our PEO service,
Insperity® Workforce Optimization®:
• Better health insurance
• Employee benefits management
• Payroll (processing, compliance,
record management)
• Employer liability management
(including workers’ comp)
• Recruiting and outplacement support
• Performance management support
• Training and development
• A dedicated service team
• Additional business services

5. Their client and professional references
Ask for referrals from other businesses in your industry and/or geographic location.
6. The company’s administrative and management expertise and competence
What experience and depth does their internal staff have? Are they familiar with the laws governing your state?
7. How employee benefits are tailored
Determine if they fit the needs of your employees. Will you have input into HR policies?
8. The fine print
Are the respective parties’ responsibilities and liabilities clearly laid out? What provisions permit you or the PEO to
cancel the terms of the contract? Does the company carry professional liability insurance? What coverage (if any)
will you gain?

Your company can buy in and compete in today’s marketplace with the help of HR
outsourcing. A PEO can shoulder the bulk of your administrative burdens so you can focus
on what matters most — growing your business.

See page 10 to learn more about our comprehensive PEO service, Insperity® Workforce Optimization®.

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Here’s How Insperity’s PEO Service Can Give Your Business a Boost
As a small business, the more time you spend managing daily HR to-dos, the less time you have to focus on
profitable projects.


Watch video

See what our clients are saying.
Thelab is a media arts firm headquartered in
New York. Before signing on with Insperity
in 2007, they lacked the resources to handle
day-to-day HR duties, including benefits
administration, government compliance and
payroll processing. Thelab solved this problem
with a tailored set of business performance
solutions from Insperity.
“Choosing Insperity is probably one of the best
business decisions I’ve ever made.”
Tom Conti, EVP and COO thelab

With Insperity® Workforce Optimization® you’ll get administrative relief, access to better benefits, reduced
liabilities and dedicated HR support from our experienced service team so you can spend more time doing what
you love – growing your business.
As a Workforce Optimization client, you’ll receive:
Affordable employee health insurance and benefits
Give your employees access to Fortune 100-level benefits. Choose from a range of benefits packages from a
variety of insurance carriers, including our national medical insurance carrier, UnitedHealthcare®.
Stress-free payroll and HR administration
Ensure your payroll is always complete, accurate and on time. We’ll also handle all your payroll-related taxes and
employment verification, benefits administration, employee-related paperwork and other HR tasks.
Complete government compliance
Limit employer-related liability by allowing us to handle your government reporting, agency interface,
unemployment claims management, and wage claims and audits.
Ongoing health care reform support
Ever since health care reform was enacted in early 2010, we’ve been reviewing and analyzing the law. We’re ready
to take on the increased compliance and complexity, shielding you from costly penalties.
A dedicated HR service team
Get a team of professional HR specialists who can lend a helping hand with day-to-day HR duties as well as
employee recruitment, retention and management.

Contact us today to learn how our unmatched HR services and support can help your
business forge ahead.

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About Insperity


Insperity®, a trusted advisor to America’s best businesses for more than 28 years, provides an array of human
resources and business solutions designed to help improve business performance. Insperity® Business
Performance Advisors offer the most comprehensive suite of products and services available in the
marketplace. Insperity delivers administrative relief, better benefits, reduced liabilities and a systematic way
to improve productivity through its premier Workforce Optimization® solution. Additional company offerings
include Human Capital Management, Payroll Services, Time and Attendance, Performance Management,
Organizational Planning, Recruiting Services, Employment Screening, Financial Services, Expense
Management, Retirement Services and Insurance Services. Insperity business performance solutions support
more than 100,000 businesses with over 2 million employees. With 2013 revenues of $2.3 billion, Insperity
operates in 57 offices throughout the United States. For more information, visit

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