Employees/Human Resources
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Business Owners Turn to Alternative Hiring Methods

For many small businesses, the administrative burdens of hiring, managing and
paying employees are just too much to contemplate. As a result, many business
owners are turning to alternative methods of hiring staff, including something
called the “professional employer organization” or PEO.

PEOs are companies that help businesses find and hire people, plus manage
such things as health benefits, workers’ comp claims, payroll, unemployment
insurance and more. As a business owner, you contract with a PEO to assume
these and other responsibilities, allowing you to concentrate on the revenue-
producing side of your operations. PEOs establish and maintain an employer
relationship with the workers assigned to you and assume many employer
responsibilities and risks.

Most small businesses are new to the “human relations” or HR field. But one
advantage of using a professional employer organization is that they already
have experienced HR pros who can handle benefits, payroll, OSHA compliance
and just about everything else you will need. By bringing employees into a larger
overall group, a PEO can offer your workers benefits such as health insurance
and retirement plans that you’d be hard-pressed to deliver on your own.

Pre-employment testing is another area PEOs can help. Without a screening
process, you risk placing the wrong person in the job, leading to lost productivity
and costly turnover. PEOs tailor pre-employment tests to predict loyalty to you as
well as success on a specific job. The tests aren’t foolproof, but they can have a
big impact.

Small business owners often dread the prospect of reading mountains of
resumes and conducting interviews for prospective hires. PEOs can reduce this
burden and deliver candidates quickly, then handle the paperwork for the new
hire. Some PEOs have entire divisions devoted to recruiting and helping small
business owners gather information to make the right hiring decisions.

Many entrepreneurs who’ve used PEOs credit the choice with helping grow their
businesses quickly. The National Association of Professional Employer
Organizations (NAPEO) is an excellent source of information and help. The
organization’s Web site describes how PEOs work, the benefits of using one
and guidelines for selecting one that’s right for your business and industry. Visit
the Web site at www.napeo.org.  

To learn more about HR issues facing your small business, contact SCORE
"Counselors to America's Small Business." SCORE is a nonprofit organization
of more than 10,500 volunteer business counselors who provide free,
confidential business counseling and training workshops to small business
owners. Go to www.scoredm.org on the web or call (515) 284-4760 between the
hours of 10:00 A.M. and 3:00 P.M. Monday through Friday.