Is a PEO Career Right For You?

The professional employment organization (PEO) industry is growing at an annual rate of 10% per year. Put another way, the PEO industry grew to $71 billion in gross revenues in 2009! (*NAPEO) With that kind of growth, you'd think that graduating seniors with HR majors would be tapping into the PEO industry for jobs, but even after almost thirty years of existence, many of them have still never heard of PEOs! The good news is that PEO companies can offer a graduating senior a chance to gain real-world HR perspective and practice.

Why Companies Choose PEOs

Human Resources, Benefits Administration, Payroll and Risk Management are all areas of a business that produce a lot of overhead, but little in the way of revenue. Further, each of these departments is labor intensive and painful; yes, painful. Just ask the business owner who had to reprint last year's W2s for his employees due to an oversight in the 401(k) deductions. Or, ask the harried Human Resources Manager, who cannot insert his/herself into the company's goals, because she is trying to update the company employee handbook. Another example is the company who finds they are at the wrong end of an EEOC claim, with no documentation to support their side of the case. One of the most important reasons a company chooses a partnership with a PEO is to secure affordable health and welfare benefits for its employees, on a scale that is usually reserved for much larger companies.

When a company partners with a PEO, their employees become co-employed by both entities; the PEO and the company now share the employment risk, which will be discussed later in this article. These are just a few of the reasons companies seek the partnership of a PEO and it is also the reason grads should consider the PEO industry when launching their HR careers.

Types of HR Jobs to Expect at PEO firms

PEO job openings are expected to increase over the next several years and the more successful PEOs typically offer salary ranges that exceed the local and national averages. For these reasons and more, understanding some of the unique roles available at PEOs is advantageous to grads seeking to enter the field of HR. PEOcompare.com has put together five categories of PEO jobs, as well as descriptions of various tasks typically performed in each category. These five categories include: Risk Management; Benefits Administration; Benefits Management; Payroll/ Payroll Tax; and Human Resource Consulting. Of course, there are other categories within the PEO that may be of interest, such as Finance, Recruiting, and Sales.

Risk Management

A Risk manager will provide safety services and safety training to PEO clients in accordance with the Service Level Agreement (SLA) that was executed between the PEO and the client. Because the Professional Employment Organization takes on a level of employment risk, the Risk Manager's job is to identify poor performing clients from a risk and safety standpoint, and then make recommendations within the scope of a Risk Improvement Program. The Risk Manager will generally conduct onsite safety surveys, in addition to interviews that will identify actual and potential safety hazards within the business operations. Once the Risk Improvement Program is enacted, the Risk Manager will continually evaluate the effectiveness of each client's controls of the identified hazards/potential hazards associated with the client's operations. The Risk Manager will document the results of the evaluations, via onsite visits, utilizing Risk Department guidelines. Applicable OSHA regulations and compliance requirements are also provided to the client by the Risk Manager. Risk Managers should have good working knowledge of computer-based programs and an understanding of NCCI (National Council on Compensation Insurance) as well as Occupational Class Codes, to be able to periodically review the applicability of those codes for their clients. Ideally, the Risk Manager will have or will pursue the following certifications: Associate Safety Professional (ASP); Certified Safety Professional (CSP); Associate Risk Management (ARM); or, Certified Industrial Hygienist (CIH).

Benefits Administration

Benefits Administrators perform tasks that include prompt and efficient day-to-day health and welfare benefits enrollments and changes to ensure little or no delays in coverage for client employees. The Benefits Administration team has the responsibility for developing, producing, and maintaining final approval for all PEO benefits communication materials for products, new clients, monthly eligibility, and annual enrollment. This team is also called upon to conduct internal benefits product training for Sales, HR Consultants, and other colleagues.

As mentioned above, one of the major tasks performed by Benefits Administration is the Annual Benefits Enrollment campaign. This yearly event includes providing client employees with benefits materials for the next plan year; a component of this activity is employee training for any new benefit plans or coverage rules.

Typically, the department head will establish standards and metrics, which are then executed by the Benefits Administration team. The Department Head will also provide ongoing leadership and direction for the team and the team's supervisors. An understanding of various plan rules, state and federal regulations, and exceptional customer service are key success factors, as this department is often the leading edge of the PEO. This team also works hand-in-hand with the Benefits Management/Benefits Compliance group.

Benefits Management

This team is accountable for developing and implementing the overall Health and Welfare Benefit strategy, with the objective of attracting and retaining new clients. Activities include: strategic direction; planning; the design and financial oversight of the benefit plans and programs; and aligning with goals, guiding principles, and philosophies of the PEO.

Benefits Management will oftentimes provide subject matter expert support to the Benefits Administration team, thus ensuring that clients and client employees are accurately informed about company benefit plans and any proposed changes. With an eye to the future and an awareness of new sales, in addition to client retention, this team will monitor local market practices, trends, and requirements to ensure benefit offerings remain competitive and legally compliant.

Interaction with other areas of the PEO, such as Risk Management, Finance, and the Legal department, are common. Finally, the benefits management team will manage the relationships of all benefits vendors (health and welfare insurance carriers) to negotiate pricing and to ensure that service levels are met. Members of the Benefits Management team should have obtained, or consider actively seeking, CEBS (Certified Employee Benefits Specialist) certification.

Payroll & Payroll Tax Professional

Payroll/Payroll Tax team members are another leading edge position within PEO companies, in relation to client satisfaction. Nothing can tarnish a client-to-PEO relationship more than having client employees not being paid accurately and on time. It is essential that Payroll/Payroll Tax team members be familiar with state and federal wage and hour laws concerning such areas as: paying Exempt vs. Non-Exempt employees; setting up direct deposit for employees; overtime rules; how bonuses are taxed; garnishments; filing client payroll taxes; and final pay rules.

Payroll/Payroll Tax management sets the standards for this department in alignment with overall company goals. Metrics should be kept revealing the number and accuracy of payrolls processed; this becomes a tool for gaining new clients, as well as a tool for departmental improvement.

Knowledge of computer-based payroll systems is essential and APA (American Payroll Association) certification is highly preferred.

Human Resource Consultant

The Human Resource Consultant becomes the extension of the client's HR department, or as is the case for many clients, the entire HR department. HR Consultants advise clients on a day-to-day basis regarding HR best practices throughout the employee life cycle: hiring; administering policies and procedures; promoting; discipline; and termination. HR Consultants are experienced professionals who have working knowledge of state and federal employment laws. Keeping clients compliant in all areas of employment law is essential to avoid costly litigation. Additionally, HR Consultants will sometimes provide onsite training, if needed, to client employees.

This position quickly establishes a good rapport with the client and its managers, earning trust and value. A deep understanding of not only the client's business, but the client's industry is essential to a long-lived relationship, because laws and regulations can greatly impact certain industries.

It is recommended that HR Consultants have or be prepared to obtain certification through HRCI (Human Resource Certification Institute).

A PEO Career?

PEOs offer a great way to enter the field of HR because most, if not all, HR disciplines are represented by the various positions. As this article has hopefully demonstrated, beginning a new career in the PEO industry is one that deserves consideration. Learning more about your chosen field, while working and earning an above-average salary in many cases, is a great way to put that shiny new degree to good use! You may visit www.peocompare.com to learn more about the different PEOs in your area. Good luck!