PEO

A Professional Employer Organization (PEO) provides a service under which an employer can outsource employee management tasks, such as human resources, employee benefits, payroll and workers’ compensation, recruiting, risk/safety management, and training and development.  By filing under a joint EIN number, the PEO is able to leverages its buying power via economy of scale.  This helps keep costs down with shared employees and generally better rates on insurance lines.

ASO

An Administrative Services Organization ASO – Offers cost effective human resources, payroll and benefits administration.  The employer can pick and choose from an a la carte menu of available services (recruitment, benefits administration, payroll, etc.). There’s no co-employment relationship in this model, the employer maintains all business liability and receives no group buying power on insurance lines.

PEO Insurance Boca Raton, FL
How much help do you need with HR?

Are you mostly self-sufficient, but have a few HR needs? Then an ASO could be the smart choice. However, if you’re in need of professional HR services offering unique design and delivered polices, then choosing a PEO would be more valuable.

What is your budget?

Although both do save money in soft cost efficiencies, a PEO carries a higher administration fee than its ASO counterpart. PEO’s generally offset some cost from group buying power on insurance lines.  They also provide more hands-on administration help that reduces back office soft cost.

Workers compensation coverage and risk management is important to me?

If you are in a high-risk category for workers compensation, PEO’s provide a layer of protection in their master policy. An ASO model on the other hand, you would remain on your own.

A PEO also helps with administrative tasks such as taking in claims, answering questions, coordinating medical treatment.  They provide pay-go, meaning the premium is deducted each pay period rather than upfront and audited at year end. In this model, the audit goes away, meaning less headaches for you.

Employee Benefits and Administration. Do we need more options at a better cost? Do we need help to administer our benefits plans?

A PEO offers a cost-effective master policy when compared to an ASO model.  Both provide administrative tasks, but a PEO integrates into the payroll or technology platform they are providing.

We have high turnover and unemployment claims, our SUTA rate is high?

In an ASO model, you report under your own EIN number.  If your claims are low and your rate is low – you may benefit from an ASO model.  If you have high turnover with employees seeking unemployment, the PEO model becomes more cost effective.

You would not only save money by reporting under the PEO SUTA rate, they would attend claims hearing on your behalf.  The HR department would be hands on in the PEO, and help to put in policy that would reduce turnover and mitigate claims.

Get in touch with GIGA Solutions today to discuss how to optimize your business. We’re dedicated to helping businesses identify outsourcing options that help you grow. Call (561) 257-0807 to get started.

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