Allevity Blog

Understanding the Co-Employment Relationship

May 7, 2014

There are bargaining chips passed between couples every single day and in a thousand different situations.  

I’ll cook if you do the dishes.

I’ll bite my tongue around your mother if you let me watch football uninterrupted. 

It’s your turn to get up with the baby. Move!

These are the conversations that guide the roles and responsibilities held within any pairing. Compromise and teamwork are the cornerstones of all functioning partnerships, and they are the same themes that guide co-employment relationships as well – only, without the snoring and morning breath to contend with. 

What is a Co-Employment Relationship? 

Professional Employer Organizations (PEOs) exist to lighten the load of the clients they partner with. These organizations facilitate the co-employment relationships that allow companies to focus on leadership and development while someone else handles the human resources side of things. 

PEOs take contractual responsibility for companies’ employees, ensuring they are paid, safe and thriving in their working environment. With human resource management expertise, they are able to streamline employee relations, benefits, payroll, tax compliance and more so that a company can put their efforts into continuing growth. 

How Do Companies Benefit?

All too often businesses fail because, while they were built upon strong ideas and leadership, those in charge didn’t know how to manage the minutia of actually running a business. Ingenuity and passion are only part of the equation – the rest is the boring stuff that most people wish they could hand off to someone else.

The beauty is that with co-employment relationships, companies can hand off that boring stuff; the paperwork and compliance laws that can bog down many organizations. PEOs are the experts providing clients with the most up to date services. They are often able to provide employees with benefits the business could not have previously maintained. By sharing the responsibilities, the PEO takes on the minutia while the client is able to focus on the ingenuity and passion that otherwise drives the business forward. 

In other words, the client does the cooking and the PEO handles the dishes.  

Uncovering the Myths

There are a lot of misconceptions about co-employment relationships. Some people fear that PEOs may be able to step in and change a company’s direction or hire and fire employees at will. It is important to know that while a PEO shares in the responsibility of employees and handles human resources management, the client remains the master of their own destiny. They maintain control over all staffing and business decisions, while the PEO simply ensures the company is remaining in compliance and providing a safe and productive work environment to employees. Both companies are considered employers to some extent, but the roles remain relatively defined. 

Like any good relationship, clients and PEOs work together to keep an organization functioning at an optimum level. When a company doesn’t have the expertise or resources to commit to human resources management, a PEO can take over the aspects of running a business that otherwise seem to be getting in the way. Employees benefit, corporate leaders are able to focus their own expertise and all the dishes get washed and put away.

There aren’t many relationships that get much better than that.  

Free Consultation
Providing comprehensive and affordable HR & payroll services