Al Anastasi

It’s no secret that Human Resources (HR) outsourcing is thriving. According to the Outsourcing Institute’s Annual Survey of Outsourcing End Users, companies have clear ideas as to what they want from their HR outsourcing resource. Not surprisingly, cost reductions were a top priority followed closely by access to external skills and knowledge, process improvements and the ability to focus on more strategic activities. But how can a business considering HR outsourcing be certain they will derive the maximum benefits. One way is by entering into a relationship with an experienced Professional Employer Organization (PEO).

When a business enters into a PEO arrangement, Alcott HR Group for example, will handle virtually every aspect of its employee-related services. These services include: payroll administration, employee benefits design and administration, tax administration and regulatory compliance. Also provided are a wide range of employee services and value-added benefits such as Employee Assistance Program (EAP), college tuition and adoption assistance, and an “After Hours” program entitling employees to discounts for shopping, transportation, travel and entertainment, fitness club memberships, etc. Additionally, the company offers other perks such as on-site defensive driving courses to help employees lower their auto insurance premiums, as well as flu shots for employees and their families and medical screening tests.

While providing a total solution is one reason companies are drawn to a PEO like Alcott, another is evidence of Alcott’s commitment to the highest standards of competency, ethics and financial stability. For a PEO, the best evidence of this is its Employers Services Assurance Corporation (ESAC, www.esacorp.org) certification. ESAC is to the PEO industry what FDIC is to the banking industry and SIPC is to the security industry. To achieve the certification, a PEO must meet stringent financial, professional and ethical standards. Upon meeting these criteria, the company joins an elite group of ESAC-accredited PEOs nationwide who are covered by a $1 million bond held in trust by a major national bank attesting to the PEO’s performance against contractual obligations to its clients, as well as excess coverage in the amount of a $10 million surety bond. To retain their ESAC certification, PEOs must submit to annual reviews to demonstrate their continued adherence to the industry’s highest standards.

Another valuable credential to seek out in a HR outsourcing partner is The PEO Workers’ Compensation Risk Management Best Practices Certification. For Alcott HR Group and other PEOs with this credential, it is an assurance to their clients that the company follows what the insurance industry has deemed best practices in workers’ compensation risk management and related cost containment. In view of continually rising Workers’ Compensation premiums, this credential should be weighed heavily.

The staff of a PEO/HR outsourcing partner should also be considered. If the intent is to gain access to experienced, knowledgeable HR professionals, their credentials too should be assessed. Among the credentials that should be held by the HR outsourcing partner’s staff is the PHR certification which is awarded by the Human Resources Certification Institute affiliated with the Society for Human Resource Management (SHRM). It denotes individual’s possession of the theoretical knowledge and practical experience necessary to pass a rigorous examination demonstrating his or her high proficiency within the field of human resource management. Another important designation is that of the Certified Payroll Professional (CPP) awarded by the American Payroll Association (San Antonio, TX). The CPP designation reflects the individual’s proficiency in all facets of payroll operations, including taxation, compliance, payroll systems, accounting and management. Another important professional who should be on staff is an experienced employment lawyer who can advise the internal PEO staff in the critical and complex area of workplace regulation and compliance

How else can a business considering an HR outsourcing relationship be assured it has selected the best partner? Think technology. The best PEOs like Alcott, apply leading-edge, web-based technology that enable their client companies and employees to manage their benefits online from any PC on a 24/7 basis.