Outsourcing your business’s human resource and administrative tasks ensure regulatory compliance and allow you to focus your efforts elsewhere. In this case, you’ll need to decide between a professional employer organization (PEO) and an administration service organization (ASO). Understanding the difference between these two outsourcing options will help you make the best decision for your company.

Professional Employer Organization

If you’re looking for an organization to take complete control of administrative and human resource tasks, a PEO has much to offer. PEOs handle responsibilities like staffing, including the completion and submission of tax documents, deciding on employee benefits and health insurance, and handling workers’ compensation matters.

PEOs are also responsible for compliance with employment laws, which can save your company both time and money by preventing issues. 

Working with a PEO means entering into a co-employment relationship with that company. The PEO you choose will have authority over many administrative and human resource decisions. While this is often beneficial since your company won’t need to allocate time or energy towards these tasks, some businesses aren’t comfortable relinquishing control over these areas. 

Administration Service Organization

An ASO offers similar services and guidance as a PEO, but without assuming control over aspects of your business. For example, an ASO can provide advice on matters like taxes, payroll, regulatory compliance, and staffing. 

There is no co-employment relationship established between the ASO and the client company. The client company can take the ASO’s advice but is completely responsible for implementing it and completing tasks. The client company will also be held responsible if any problems with compliance occur, such as failure to properly remit payroll taxes. 

Are you still not sure whether a professional employer organization or an administration service organization is right for your business? Talent HR Solutions offers a wide range of services to business owners in Honolulu and will help you choose between a PEO and ASO. They also provide customized packages, so you can tailor their services to your needs. Call (808) 354-0498 to schedule a free consultation, or visit them online for a full list of the services they offer.