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Why Is Co-Employment Important to HR Outsourcing?

Why Is Co-Employment Important to HR Outsourcing?


HR outsourcing can be done with or without co-employment. However, depending on what your business needs, co-employment may offer you far more than other types of HR outsourcing—and it has some advantages that traditional outsourcing cannot match.

To start with, let’s look at traditional outsourcing vs. co-employment with a PEO:

  • Traditional HR Outsourcing:
    • You hire HR professionals as contractors, either on-site or off-site, to do specific tasks
    • The contractor does not represent you legally
    • The contractor may offer benefits management, but cannot change the kinds of plans you qualify for
  • Co-Employment:
    • Your HR provider becomes the legal “employer of record” for your work force
    • The provider (the PEO) can now represent you in employee disputes, unemployment claims and other types of claims
    • Your company may now qualify for better benefits or better prices because you are a larger organization when teamed with the PEO.

Does your particular company need all of these advantages? It depends. If all you need is someone to do payroll or administer benefits, then no—traditional outsourcing can work well. If you are looking for cost savings, better benefits, and a comprehensive HR solution, then co-employment is the right way to go.

Do I get better HR results with co-employment?

In some ways, yes. There are many traditional HR providers that do good work, and it’s possible to completely outsource HR without using co-employment. However, PEOs tend to offer comprehensive HR services and high-level HR strategy. That can mean:

  • Recruiting, training and onboarding
  • Management development
  • Bottom-up systems to improve employee performance
  • Reduced employee turnover
  • Risk management
  • Government compliance
  • …plus all of the usual HR features like payroll, taxes, employee termination and more

Does co-employment have any risks or drawbacks?

Co-employment is designed to benefit you, the client. That’s why you retain all the executive power in the relationship. Your company remains a fully autonomous business, and you retain all the authority over your workers. Your co-employment contract ensures this, and contracts can be customized along with the services provided to make sure you are getting exactly what you need.

The main things you should look at when evaluating whether co-employment is right for your company include:

  • Does my company need comprehensive HR support, or only help with some tasks?
  • Do I have a desire to offer better employee benefits?
  • Am I seeking savings on benefits?
  • Would my company benefit from compliance oversight or risk management?

If the answer to any of these questions is yes, co-employment may be a good choice.

Is co-employment the right choice for your company?

Einstein HR combines expertise with an emphasis on service. We have decades of experience offering hassle-free co-employment services to clients in all industries. Let us give you a free consultation on your PEO needs. Fill out the form to your right or contact us and get your free consultation today.

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