From my perspective, as the president and CEO of a Professional Employer Organization (PEO) and an HR veteran, there are two types of PEOs small and midsize business have to choose from:
- PEOs who lead with technology, or
- PEOs who lead with relationships
In this article, I’ll share with you my thoughts on both types of PEOs as well as why I think option two, PEOs who lead with relationships, are the best option for businesses of all sizes.
First things first: What is a PEO?
A professional employer organization (PEO) is an outsourced solution that allows its clients to outsource many of their human resource functions, share employment liability, and, oftentimes, gain economies of scale to bring an improved benefits package to their employees. A PEO is an extension of your business and engages with your management team to address complex employee-related matters, along with a technology platform to manage all your employee data.
A PEO contracts with your business to perform the following processes; they also assume associated responsibilities, and provide ready expertise in human resources management.
- Onboarding
- Health benefits
- Payroll
- Payroll tax compliance
- Leaves of absence
- Paid time off practices
- Workers’ compensation claims
- Unemployment insurance claims
- COBRA
Tech-first vs. People-first PEOs: Breaking down the two types
At first glance, most PEOs look similar. If you’re browsing PEOs online, it’s probably difficult on their websites to tell how they really differ from each other. The main difference?
PEO services are not delivered the same way from PEO to PEO.
PEOs can largely be divided between technology-led PEOs and relationship-led PEOs. This distinction matters when it comes to the service aspect of a PEO partnership—which, I argue, is the most important part.
Here’s the thing: All PEOs have essentially the same technology/software offerings. They may look different from one company to another, but software is software. Companies who lead with this angle may have pretty websites, but because they put so much emphasis on the software, that’s where their clients have to go to get answers.
Technology-Led PEOs: Not as helpful as they may seem.
Typically, technology-led PEOs automate their services through online tools and focus on sales instead of creating long-lasting relationships and solving problems. For example:
- Instead of calling someone who knows your company and your name, you have to check an FAQ list on a website.
- Instead of talking to a dedicated HR specialist who knows your company’s challenges, you have to deal with online chatbots.
- Instead of getting an answer, you get to open a ticket and hope someone answers you who understands what you’re dealing with.
And that’s a problem. You can’t automate everything—especially when it has to do with people! After all, this is HUMAN resources! Even the most tech-savvy platform in the world can’t replace, or even compete with, a team of real-life experts in the fields who are there when you need help.
When I am facing a challenge, I want to talk to someone, share my problem, and be able to rely on their expertise to get me through the obstacle—not deal with online queues and chatbots. I think most executives feel the same way.
People-first PEOs: Your best bet.
Relationally driven, people-first PEOs like GenesisHR focus on building relationships first and foremost. We want to better understand your business and your employees, so we have a better impact on both.
You’ll find that with people-focused PEOs:
- You have discussions with experts who know your company inside and out.
- You get custom coaching to help you grow your business in targeted ways.
- You have personalized relationships with HR specialists that reach every aspect of your business.
- It’s easy to increase benefit contributions, add PTO policies, update handbooks, and take care of any compliance questions that come up.
- You can expect convenient, timely responses when you reach out with challenges. At GenesisHR, we’re proud to offer resolutions that don’t take days of back-and-forth ticket opening, transferring, etc. Instead of taking days to get to someone who can help, you’ll get focused attention, so the issue doesn’t grow larger. In fact, our clients can reach out to their dedicated HR business partners and have a discussion same-day; together, they come up with recommended resolutions quickly.
- You still get excellent, integrated software technology tools to handle all of your needs, from employee onboarding and management, to payroll, to benefit enrollment.
Find out more about GenesisHR’s people-first PEO solution.
You may be wondering if there’s an easy way to differentiate between people-led and technology-led PEOs. Well, if you’re reading this article, you’ve found a people-led PEO! Please get in touch with us if you want to know how our PEO services can help your business grow. And if you’re not quite ready to have a discovery call with our team, check out our free download: A Checklist For Choosing A PEO.
