Spend More Time Focusing on Your Practice

For many small to midsize practices, the challenge of managing the ever-evolving human resource functions has become increasingly daunting and complex.


Physicians know all too well the frustration of spending more time than they want on nonpatient care. With payroll, human resource management and the administration of benefits plans, one can spend more than 30% of the day engaged in these necessary, but time-consuming, tasks.


PEOs Help Businesses and Their Employees


The answer for many growing practices may be to consider hiring one of the more than 700 professional employer organizations (PEOs) in the United States. A PEO enables physician offices to cost-effectively outsource the management of administrative and human resource functions for their businesses, including:

• human resource management
• payroll services
• employee benefits
• workers’ compensation and risk ?management

You may typically think of a PEO as a full-service, off-site human resource department. Your practice recruits and hires staff members and, in turn, your staff members become “shared employees” or “co-employees” of your company and the PEO. You as owner provide the day-to-day management of the shared employees, and the PEO specialists then take care of the ancillary human resource functions and associated paperwork.


Improved Benefits and Better Workplaces


PEOs help tens of thousands of companies provide benefits such as health care plans, 401(k) plans and other perks to working Americans. PEO-sponsored benefit programs can include major and supplemental health care choices, including vision and dental care and employee assistance programs.


PEOs can also improve the work environment and make it safer. They focus on workplace risk management, safety programs and good human resource practices. PEOs arrange workers’ compensation coverage with major insurance carriers and manage the claims. They also deliver human resource services, including payroll, unemployment taxes, customized employee handbooks, pre-employment screening, wage and compensation planning, and customized training.


Factors to Consider When Selecting a PEO


The National Association of Professional Employer Organizations (NAPEO) offers the following guidelines to companies considering a relationship with a PEO:


Is a PEO right for me? Assess your practice to determine your human resource and risk management needs. Make sure the PEO is capable of meeting your goals. Meet the people who will be serving you. Ask for client and professional references.


Does the PEO have a demonstrated history of adherence to the industry’s professional performance practices, including responsible financial management of its business? Check to determine if the PEO’s financial statements are independently audited by a CPA, whether his or her risk management practices have been independently certified by the Certification Institute, or if his or her operational, financial and ethical practices have been independently accredited by the Employer Services Assurance Corporation. Also, confirm that your PEO is a member of the NAPEO, the national trade association of the PEO industry. Only a small fraction of the 700 registered PEOs in the U.S. meet each of these strict standards.


How much does a PEO cost? Like all professional services, PEO pricing depends on the company or organization. Costs can be considered in a number of ways, including percent of wages, on a per employee basis, or at a flat rate or fee per month. In any case, you’ll want to weigh the cost savings of time and productivity gains by having a PEO relationship. Many times, some or all of the costs associated with doing business with a PEO can be offset by the associated savings in the products the PEO may offer, such as discounted workers’ compensation insurance, health insurance and 401(k) plans.


What services do you need? Most any size practice can find value in a PEO relationship, even those with just a few on staff. PEO clients include a range of professionals, from specialist groups to full-scale medical practices, all benefiting from PEO services.


Selecting the right PEO for you and your practice is of the utmost importance. You want to find a company with strength, stability and a dedication to customer service. You need to feel that you and your staff will be well taken care of and that your needs and goals will be met. Look for a PEO that will personally meet with key members of your practice to listen to your requests, and discuss and assess your critical needs. Also consider that some PEOs specialize in a web-based high-tech approach, while others are focused on face-to-face support. Be sure to seek a PEO that best fits your unique needs.


By: Aaron Seaman and Todd Newton