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Do Owners Lose Any Control Over The Business With Co-Employment?

Do Owners Lose Any Control Over The Business With Co-Employment?

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When a business owner hires the services of a PEO, or Professional Employer Organization, their company enters into a co-employment relationship with the PEO. This business relationship means that the PEO is considered an employer of record for the employees of the client business. However, business owners do not lose control over their company.

The co-employment relationship is important for outsourcing your human resources needs. Companies like Einstein HR offer many different HR services as a PEO, making your life easier as a business owner and improving the efficiency and quality of the HR services rendered to your employees.

Aspects of the Co-Employment Relationship

The way that co-employment works is simple, but each co-employment arrangement can be altered to meet the needs of the client company.

The Business Owner

As the business owner of the client company, you are considered the Executive in the co-employment arrangement. You retain control of your business, remain an employer of your employees, and have final say in all decisions regarding your company. Additionally, you decide which services you want the PEO to render, and these are spelled out in the co-employment agreement.

The PEO

When you sign a co-employment agreement, the PEO becomes an additional employer of record for your company’s employees. This simply means that the PEO has legal authority to conduct certain services and handle sensitive information like payroll and employee benefits.

Reasons to Consider Co-Employment

Some of the benefits of using a PEO in a co-employment relationship are similar to the benefits of simply outsourcing your HR needs. However, being in a co-employment relationship allows a PEO to offer more in-depth services, compounding the benefits of an HR outsourcing company.

Lower Costs

The cost of using a PEO is often cheaper than hiring an in-house human resources staff. Depending on the PEO and the specifics of the client company, PEOs can be paid either as:

  • … a percentage of overall payroll in each pay period, or…
  • … on a per-employee, per-year basis.

Lighter Burden on the Owner

Since PEOs are often backed by many years of experience, such as the five decades of combined HR experience we have at Einstein HR, business owners can rest more easily in the knowledge that their HR services are being performed by professionals. This allows owners to focus on the daily operation of their business rather than being bogged down by administrative work.

Lower Risks

Another benefit of using a PEO in a co-employment arrangement is that the expertise of a PEO often equates to lower overall risk for a client company. PEOs can help ensure that the client company is in compliance with state and federal labor regulations.

Better Employee Benefits

When you enter into a co-employment relationship with a PEO, your employees are considered employees of the PEO as well. Since PEOs often serve multiple businesses, they are better poised to negotiate for a higher tier of employee benefits packages and can spread the cost of those benefits packages across a larger number of employees. This means that PEOs can offer better benefits to your employees at a lower price.

The data does not lie. According to information accumulated by the National Association of Professional Employer Organizations, companies who use a PEO:

  • Have 7-9% faster growth
  • Have 10-14% lower employee turnover rates
  • Are 50% more likely to remain in business

Services Offered by PEOs

You can enter into a co-employment arrangement with a PEO for all of your Human Resources department needs. However, as the Executive in the co-employment relationship, you can dictate exactly which services you want the PEO to perform. At Einstein HR, we allow client businesses to select individual services on an a la carte basis as well as covering wholesale HR needs. Services offered by a PEO include:

A PEO For All HR Needs

Einstein HR was founded by long-time veterans of the Human Resources industry. We have more than fifty combined years of experience and have assisted companies that include aerospace businesses, financial institutions, retail outlets, construction companies, and more. In fact, companies that we have helped in the past range from smaller, local businesses to multinational companies.

The size of your business does not matter, either. All companies can benefit from using a PEO like Einstein HR. We have served clients with as few as five employees as well as larger business that have more than 500 employees. No matter what your individual needs are, you can fulfill them by entering into a co-employment relationship with us.

Get Your FREE Quote On PEO Services

Fill out the form to the right of this page or contact us today to receive a FREE quote on our services. One of our representatives will be in touch with you within 24 to 48 hours to begin the process. With our co-employment relationship in place, you can start saving time and money!

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