You should always know what you are really buying.
The PEO model is flawed, yet thousands of companies are bought into a system that eats profits, underperforms, and provides lobbied choices.
The Difference Between a PEO & HRO
When researching the best outsourcing choice for your company's HR, Payroll, Benefits & Workers' Comp pricing and management, and other HR-related products it's important that you know the clear difference between the two general options.
PEO = Employer of Record
HRO = Not the Employer of Record
Easy Access to Data
for Better Decision-Making
Clear, low cost as opposed
to Full-Time HR Staff or a PEO
Simply put, PEOs become the "employer of record" for all of your employees and shift them under their umbrella. The "benefit" your company could receive is that it is "grouped with employees from other companies to help you get the lowest insurance and workers' compensation rates." Your buy-in to the cheaper rates, however, is generally at the cost of 2-5% of your current payroll (it depends on the size of your company). A PEO will provide you an introductory rate to woo you in, and you'll be on the market jumping from PEO to PEO every year or two, not realizing you're shelling out thousands of your company's profits to "save money" when you're required to pay another onboarding fee. Oola HR is a flat, per employee, per month rate that will allow you to know what your price will be each and every year, not a variable annual price that changes because your contract is up for renewal.
An HRO or Human Resources Outsourcing firm like Oola HR is a third-party resource. Your company stays the employer of record, and the HRO searches for the best benefit and workers' compensation rates from non-biased brokers who will work directly with you. In addition to managing payroll, there is a much heavier emphasis on HR. A PEO will most likely have a call center to answer basic questions, and they will provide a standard employee handbook, but a HRO will pair your company with a manager that you will be in regular contact with is professionally trained in current HR policy. They will work as an HR support member of your company or work in conjunction with your current HR management to improve employee retention, streamline all processes, and develop/sharpen your company's structure.
Oola HR provides a dedicated, and involved account manager.
Something important to understand when weighing the benefits of a PEO versus a HRO is benefit quoting. PEOs tout that they have "cheaper" benefit rates, but they integrate it into a high administrative fee. Many PEOs charge miscellaneous fees with no explanation as to what that fee is, so it's important that if you choose a PEO that you read your invoice every month. This is how many (not all) PEOs make up the difference: they bet on your ignorance. Oola HR is dedicated to no miscellaneous fees. We have an onboarding fee at the beginning of a new contract, but after that, the only cost will be your monthly rate.