A Professional Employer Organization (PEO) can help businesses manage human resources departments, calculate payroll, save costs and resources, helping employees and organizations both simplify many processes. So what is PEO in recruitment and what is the role of PEO in the development of small and medium enterprises?
1. Basic knowledge about PEO - professional employer organization definition
In effect, a PEO - professional employer organization definition becomes a co-owner in terms of human resources. It establishes an employee matching agreement to help client companies handle all HR administrative tasks at a lower cost, reducing the burden of actual employee salaries, paperwork, and administrative worksheets and increase work efficiency.
1.1. What is PEO in recruitment?
Professional Employer Organization or PEO is a staffing company that specializes in hiring employees. Specifically, PEO almost helps the client company "solve" the entire recruitment and human resources management process. They will sign contracts with small and medium-sized businesses, receive specific requests and then help handle some administrative functions such as payroll, taxes and employee benefit negotiations,...
Professional employer organization definition
1.2 Usual professional employer organization (PEO) companies size
PEO's customers are usually small and medium-sized businesses with about 19 - 20 employees. Meanwhile, businesses with less than 10 employees can also cooperate with PEO to save resources. The cost that the client company must pay to the PEO is usually calculated based on a percentage of the total number of employees.
1.3 What is the difference between PEO and EOR?
Hiring under a PEO and EOR arrangement are quite similar, except for two things: The EOR method will put a portion of your business and workers on its payroll, while the PEO will take on the entire workforce. your workforce and provide all HRM services and functions for your business. You can keep the labor contract if you choose PEO, but when working with EOR, EOR will keep the labor contract and the two parties cooperate according to the service provision agreement.
2. The role of a staffing company specializing in hiring employees
Because small and medium-sized enterprises often have simple human resource structures and may have difficulty proactively recruiting, training, and assigning internal staff to manage human resources activities, cooperation with a PEO being one of the most effective options. Through PEO, you can avoid spending time searching for candidates, and can also reduce the risk of hiring the wrong person. Besides, all jobs and tasks that need to be resolved will be supported and completed in a professional manner, ensuring quality. The PEO will operate in the form of co-employment with the hiring business. More simply, PEO has the following functions
2.1 Recruiting candidates:
PEO coordinates with businesses to find the most suitable candidates. PEO will help businesses limit risks such as wrong recruitment, inappropriate personnel, etc., while ensuring candidates can best perform the assigned tasks.
2.2 Internal personnel training:
PEO will help small and medium-sized businesses train employees on internal culture as well as other work processes. However, issues related to expertise will be directly trained by the company for its employees.
2.3 Welfare management:
PEO has the role of handling issues related to employee welfare such as salary, insurance, health care, taxes, other documents and procedures.
So it can be understood that PEO will be an organization that helps customer businesses take care of their employees. If you cooperate with PEO, businesses will only need to worry about issues related to professional work instead of wasting extra time and costs on human resource management.
PEO is a quite popular term in the recruitment field
>>>Read more: What services does an HR consulting company include?
3. Professional Employer Organization's operating mechanism
A Professional Employer Organization can take on recruiting, human resources, and administrative responsibilities for you through a method called "co-employment." Co-employment is a contractual allocation and sharing of certain employment responsibilities between a PEO and a client. PEO helps small businesses access to benefits, giving them maximum support.
The contract between your business and the Professional Employer Organization distributes employer responsibilities. Under that contract, the PEO as the user of record will handle payroll administration and related tax payments, while also providing HR support and access to benefits and benefits while the client company is responsible for daily operations and internal staff management. Through shared employer responsibilities, client companies can leverage staffing resources from the PEO and get important work done.
In general, PEO is a solution for small and medium-sized businesses that want to manage recruitment, human resources and administration professionally and systematically while not needing to hire new or train internal employees themselves. Many experts predict that in the future, Professional Employer Organization services will increasingly develop and reach and support more businesses.
CONTACT FARO VIETNAM today for PEO services.
HANOI HEAD OFFICE
-
Address: Unit 701A, 7th floor, Handi Resco Tower, 521 Kim Ma street, Ba Dinh
-
district, Ha Noi
-
Tel: + 84 24 3974 3091
-
Email: service.vn@farorecruitment.com
HO CHI MINH CITY OFFICE
-
Address: Unit 1102, 11th floor, Central Plaza Office Building, District 1, Ho Chi Minh city
-
Tel: + 84 28 3821 4654
Grow your business with our trusted Human Resource Solutions.