In today’s challenging economic environment, business owners have to look for ways to increase efficiencies while reducing expense.

As we continue to try to stimulate the economy with implementation of small business, one of the most expensive and frustrating aspects for small business owners is understanding and complying with employment laws.

Along with the statutory requirements to provide workers’ compensation benefits, employers today are also faced with a gamut of other employment-related challenges such as ADA, ERISA, benefit requirements, not to mention hiring practices.

In recent years, there has been an increase in employment practices lawsuits which are not only frustrating, but expensive to defend. For most small business owners, the decision to go into business themselves surrounded a dream and special talent as well as an entrepreneurial spirit.

Most small business owners are not insurance experts, nor are they employment law attorneys. While the cost of workers’ compensation insurance has dropped significantly in the past several years, insurance is an industry that cycles up and down and employers are generally at the whims of those market cycles, making it unpredictable to budget into their business model.

Defending employment practices claims can cause a small business owner to go out of business if they don’t have insurance to protect themselves.

One solution to the increasing challenges presented to most businesses is utilization of aProfessional Employment Organization, or PEO. A PEO provides services such as payroll administration, workers’ compensation, safety services, human resource management, along with employee benefits, if desired. By entering into a contractual co-employment relationship, business owners can transfer or outsource most of, if not all, of their human resource issues to experts and focus on the business itself.

A PEO can be a more competitive way to manage those aspects of the business. PEOs have been around for years and there are many different companies out there.

Some focus on payroll services with human resource services and products added on an á la carte basis while others are large publicly trades companies that offer profit sharing to their clients.

Most business owners approach their insurance program renewal dates dreading the process and results. It takes time and energy to evaluate the many options — time that could be better served focusing on the business of business.

PEOs often offer increased cash flow by eliminating deposit requirements, stabilizing expenses while eliminating the need for the annual renewal process and removing the cyclic nature of the insurance industry allowing business owners to better plan and budget these types of expenses.

In today’s challenging business economy, one alternative might be the use of a good PEO. To learn more about a Professional Employer Organizations, go to www.napeo.org.

By Andre Olivan

Consider working with a Human Resources Outsourcing (HRO) company!

Whether your company is small, medium or large, one way to ease the burden of day-to-day HR management, control costs and mitigate risk is to allow a full service HRO provider to take care of it for you.

You may currently work with several vendors to process payroll, handle benefits administration, access an HRIS, recruit and more. You may also be managing an in-house HR employee, increasing or decreasing staff, making compensation changes, providing training, attending to workers’ comp and government compliance issues, keeping up on regulatory changes in law and staying up-to-date with the changes in healthcare reform. This is a lot to manage. Costs can spiral out of control when you have to rely on so many vendors to get the job done.

All HROs are NOT equal. What to look for when sourcing HROs.

Find an HRO that is local to your business and offers comprehensive HR models including: Administrative Services Outsourcing (ASO), and Professional Employer Organization (PEO) which allows you to report employees under your HRO’s tax ID number helping you further mitigate risk.

An HRO that can provide you a dedicated client service team to answer questions and resolve issues is a plus, instead of directing you to a call center. To maximize employee retention, find one that affords your employees additional benefits like short-term and long-term disability, life insurance, access to a 401(k) plan, 529 college savings plan and Flexible Spending Accounts.

Implement HRO services now.

You don’t have to wait until next year end to make a change. You can begin transitioning your HR responsibilities to an HRO now, especially if you choose one that has a client service team to assist you.

By: Minneapolis/St. Paul Business Journal