PEOs and ASOs: The Pillars of Modern Business

Facebook has millions of daily users — yet it creates no content.

Uber transports millions of people in cities around the world — yet it owns no taxis.

Airbnb provides accommodations in thousands of cities and dozens of countries — yet it owns no hotels.

NetFlix provides online video for countless users around the world — yet it owns no theaters and only recently started to create its own content.

Facebook, Uber, Airbnb and NetFlix have all found a place between the consumer and the provider. They concentrate on what they do and they do it well.

Outsourcing is similar. There are hundreds of Professional Employer Organizations (PEOs) that take on all Payroll, Benefits and HR responsibilities, and there are hundreds of Administrative Services Organizations (ASOs) that handle parts of a company’s day-to-day workload. Both PEOs and ASOs provide the bridge to help client companies and their worksite employees concentrate on their core business and provide for their end customers.

 

Outsourcing Options

Outsourcing is not the only available option for contemporary companies. The most common options are 1, Do It Yourself or 2, HR Outsourcing with a PEO or an ASO.

 

The DIY Approach

It’s a lonely world when you don’t have enough help.

It is not so long ago that large corporations had career employees, hosted annual picnics and provided full and generous pensions, all under the supervision of a hands-on Human Relations department. Today’s companies — technology startups, restaurants, law firms — don’t have the luxury of creating and staffing an in-house HR infrastructure. The intense competition inherent in today’s business world requires focus on the final product. That is why small and mid-sized companies forego worrying about many time-consuming tasks, like health insurance; withholding and paying employment-related taxes; complying with hundreds of employment laws, rules and regulations; obtaining Workers’ Compensation insurance coverage; dealing with COBRA, ADA, OSHA, EEOC, FICA and FUTA. Many small and mid-sized companies use HR Outsourcing instead.

 

The Outsourcing Approach — PEO or ASO

Clearly, HR takes care of a lot of essential parts of a company. There are questions, however. How many resources should be dedicated to that expertise? Who should become the expert in liability and compliance? When should a company start a retirement program? Should it be just a 401(k) option? Will the company match employee contributions? Can an employee have an Individual Retirement Account, too?

When does a company become big enough to hire a dedicated HR person? Ten employees? 20? 50?

Most are not expert in workplace best practices, nor do they want to be. That is where professional help makes sense. PEO and ASO models enable companies to rid themselves of many in-house tasks in order to concentrate on their field of expertise.

There are more than 900 different HR Outsourcing companies in the United States alone. These provide access to the comprehensive benefits that much larger companies enjoy without using up too many resources. As mentioned, HR Outsourcing companies fall into two basic categories: PEOs and ASOs.

 

What is a Professional Employer Organization (PEO)?

The Professional Employer Organization model is an all-in-one solution, including Human Resources, Benefits, Payroll, Compliance, Workers’ Compensation and more. PEOs take care of the whole spectrum of services in order to increase employee productivity and engagement.

Startup technology companies are a perfect example of those who would benefit most: The general office work is outsourced so that these companies can focus on their own growth and their own effective revenue generation. Management has the final say, but the PEO removes burdensome tasks by handling the daily back-office work.

The best PEOs offer cloud-based platforms for easy integration with client companies and their worksite employees.

As companies grow, the PEO also acts as a co-employer, absorbing a lot of responsibility and liability.

Technology has made the PEO relationship even more efficient and effective. Company administration software enables PEOs to help clients consolidate their operations with a solid technical foundation for all of their many moving parts, including seamless communication, centralized operations, standardized procedures, the efficient handling of benefits, comprehensive HR support, the maintenance of a reliable Payroll system, the elimination of the inefficiencies of manual processes, transparency and superior service for management and employees.

There is nothing new about this arrangement. The PEO industry is already huge. There are hundreds of PEOs that are being used by thousands of companies employing more than 3 million people in the United States and generating gross revenues of between $136 and $156 billion.

Industry reports show that, since 2010, the growth of businesses that use PEOs is 9 percent higher than among other small businesses (based on the Intuit Small Business Employment Index) and 4 percent higher than overall U.S. employment growth. Businesses that use PEOs have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business.

Every PEO is slightly different just like every business is unique, but they generally provide:

  • An HR department, including administration and support for the entire workforce;
  • Employer of record status, with a federal tax ID, for some of the company’s employees, thus allowing for a shared employment / co-employment system;
  • Protection against some risk, liability and occupational hazards, including Employment Protection Liability Insurance (EPLI);
  • Consolidation of state and federal unemployment taxes;
  • Retirement systems, including 401(k) and Individual Retirement Accounts;
  • Social Security management;
  • Access to technology that is not affordable for small companies, including company-management platforms, time and attendance counters and employee dashboards;
  • Payroll processing and the completion of Payroll taxes;
  • W-2 form preparation and distribution;
  • Management of a wide range of Benefits administration, including health, dental, vision, life and Workers’ Compensation insurance;
  • Verification that workplace policies are in compliance with federal, state and local regulatory standards;
  • Best practices gleaned from years of professional experience;
  • Direct and readily available support for all types of HR situations;
  • Numerous paperless options to save resources and money;
  • Fully licensed and regulated status in the states where it is necessary;
  • Business plan development and guidance;
  • Assistance with creating office policies, including attendance systems and paid time off policies;
  • Development of guidelines for home office privileges for employees;
  • Establishment of branch offices;
  • Soft skills instruction;
  • Leadership training;
  • Career transition options for departing employees;
  • Grant writing expertise; and
  • Workplace safety regulations.

 

What is an Administrative Services Organization (ASO)?

The Administrative Services Organization model is a more traditional business relationship. It is basically an a la carte version of the PEO model: only some services are outsourced. Some companies, for example, only want help with Payroll. Other companies want to also establish a Benefits program. Ambitious groups want help with establishing vesting options. Even the old-school behemoth manufacturing companies used a Payroll processor instead of doing it all in-house.

Nevertheless, the basic principle is the same: management can outsource tiresome tasks to a professional organization in order to have more time to work on their core business.

Unlike PEOs, an ASO does not become the employer of record for any employees and does not take on any liability. ASOs take on specific tasks for their client companies, including every feature listed for the PEO model. General differences include:

  • The client generally outsources one or more services, oftentimes to multiple vendors;
  • Savings result from using strategic providers;
  • The client retains employees under its own Federal Employer Identification Number (EIN) for the purposes of Payroll taxes, Benefits and Reporting;
  • The client may negotiate its own insurance packages; and
  • The client uses its own policy and rates for Workers’ Compensation coverage, including the required down payment and liability for audits.

In a nutshell, HR Outsourcing companies provide the professional foundation so that companies can concentrate on their core product.

PEOs and ASOs may be the answer for your business.

Worklio is a software company that works hand in hand with PEOs and ASOs, providing the modern technology that leads to success.

Disruption is Not Necessarily Bad

Worklio Harnesses Modern Technology to Improve Your Business

It used to be that humans carried everything. Then someone invented the wheel. For centuries, people ate berries. Then came fire. Words were chiseled into stone tables, then written on papyrus and finally printed by Gutenberg.

So it goes with the contemporary world: Technology is moving things so quickly that it is sometimes hard to realize how our lives have been changed since only a few years ago.

Worklio represents a new era for the PEO and ASO industry because Worklio is introducing the technology that will forever disrupt the status quo — in a good way.

Worklio is a modern platform that will move your company into the new age of technology. No more paperwork. No need for physical signatures. Everything is connected.

There are three ways that Worklio uses the latest in technology.

  • Software-as-a-Service (SaaS)
  • Cloud computing
  • Security

All three are connected. All three make your company more efficient.

 

SaaS

Not long ago, businesses needed to install software on individual computers and keep racks of servers for data storage. Software-as-a-Service is the new way. You can keep everything on the premises, but now software is provided through the internet, data is stored in the cloud, and everything is secure.

Worklio is a SaaS company that maintains a comprehensive company-management platform for client companies to use. Worklio keeps up with technology trends. And Worklio keeps all of the data available and safe.

You simply go to an internet browser and log on. The platform is accessible from anywhere with an internet connection, including through Android, iOS, and Microsoft mobile apps. Documents can even be signed from the beach.

The normal functions of a business are faster and more efficient because of the SaaS system. The entire company shares resources. Paperwork is digitized. Repetitive tasks are consolidated. General emails are automated. Attendance and time off data is connected, so the regular payroll run is a turn-key operation. The initial set up and migration of company data is efficient and smooth, with safeguards for missing information. The learning curve is gradual because of the logical interface. The platform is scalable so that it grows as your company grows. Management has tools to keep tabs on employee tasks and activities.

 

Cloud Computing

SaaS systems exist because Cloud Computing enables solid and secure internet connections.

Cloud Computing is what eliminates the need to buy software and servers. It enables you to access Worklio from around the globe, via smart phones, tablets, laptops, and desktop computers — an internet connection provides access to anything on the system from any location and any time zone.

You are no longer bound to the office or traditional work hours.

Worklio exists in a private cloud so that all of your data is kept private and there are connections to the public cloud for updates on federal regulations, tax documents and other official paperwork.

In addition to freedom, Cloud Computing enables companies to store a huge amount of data. As you grow and data accumulates, you don’t need to add servers — the cloud absorbs it all.

 

Security

SaaS systems and Cloud Computing are only possible because of security.

Worklio has a comprehensive security system similar to what banks employ. After all, money is being transferred from the company to vendors and employees, so the level of security must be the same. If you trust your debit card, then you can trust Worklio.

The Worklio security system is validated with ISO/IEC 27001:2013 certification. The International Organization for Standardization (ISO) maintains internationally respected standards for business and ISO 27001 provides requirements for an information security management system (ISMS) in order to enable organizations to manage the security of assets, such as financial information, intellectual property, employee details and information from third parties.

Worklio respects the security and quality of all of the data that customers provide and uses multi-layered encryption of the highest standard available. There is constant monitoring, both in-house and through third-party cybersecurity firms, which meets and exceeds the industry standard.

There is a stratified system of access rights to restrict the number of people who have access to client information. All changes are logged so that all data alterations can be recreated. Data is backed up regularly. It is kept in numerous physical locations, with N+1 or greater redundancy to establish resiliency for all components.

 

Introducing Worklio: A New Beginning for the PEO Industry

Worklio™ is a new source of power and capability for the PEO industry. It is the dawn of a new era.

The Worklio™ system connects the PEO, its client companies, and their worksite employees in a comprehensive Human Capital Management (HCM) solution. Everything is compatible. All of the data is consistent. And everything exists in an enclosed, secure system.

The Software-as-a-Service platform is custom-built on the latest Microsoft® .Net and MS SQL 2016 technology platform, designed and optimized for the Microsoft® Azure Cloud, and available 24 x 7 across all devices. The Worklio™ solution is based on a solid foundation built exclusively for PEOs: Payroll Administration, Workers’ Compensation, Customized Reporting, Analytics and Intelligence, Benefit Management Tools, Human Resources, Electronic Onboarding, Billing, Job Costing, General Ledger and Accounting Integration, and Mobile Applications. The design is intuitive and user-friendly, making information easy to find and procedures simple to understand. Complicated functions are simplified with step-by-step instructions. Customization allows for streamlining daily tasks. Customer Support is always available and professional.

The Worklio™ system saves time through efficiency, saves money through consolidation and integration, and makes business more successful through collaboration.

Worklio™ — a new beginning for the PEO industry.

 

Worklio™

HR, Payroll, and Benefits

The Modern Teamwork Platform

 

* * *

Worklio will introduce its modern and powerful HCM platform to the PEO market at the NAPEO 2017 Annual Conference & Marketplace this week at the JW Marriott Orlando Grande Lakes in Orlando, Fla.

The Worklio booth is #706/708.

 

* * *

For more information, go to worklio.com .