ASO and PEO services both help provide much needed HR-related outsourced services to businesses large and small. Depending on your particular needs as a business, a PEO or ASO company might be more appropriate, so it’s important to consider their differences while considering who to partner with.
Why Choose PEO?
PEO, also known as a Professional Employer Organization, functions on behalf of small- and medium-sized businesses to provide outsourced HR services. They help to manage things like payroll, hiring, benefits, and safety management.
A PEO is a great option for businesses looking for a kind of HR services partnership, in which the PEO handles aspects of risk and compliance management of employees on behalf of their business partners. The relationship is more hands-on, and through a specified agreement the business and PEO can determine what responsibilities the PEO is considered responsible for. PEO’s often are more integrated into conveying the culture and vision of a company when they partner with them through the services that they provide, which is a further example of how they’re more of a business partnership than just a service provider for businesses.
This style of HR operations has a lot of appeal for businesses that are looking for someone to more fully take the reins on HR management, becoming a part of the company’s culture on a more personal level.
Why Choose ASO?
An ASO is an Administrative Services Organization. ASOs provide similar services to a PEO, but the role is different. While PEOs operate as a kind of business partner to the businesses they support, an ASO does not.
An ASO handles administrative, HR-related tasks while usually not offering workers compensation or employee benefit management. They can help with securing that coverage on behalf of clients, but they don’t manage or administer it on behalf of businesses after the fact—meaning they’re much more hands off in these areas. Under an ASO, the company seeking management assistance retains primary and sole control over their business and operations.
An ASO is a much better option for businesses wanting to retain sole ownership of their business, while still reaping the benefits of HR services and administration that happen through outsourcing. You can retain that ownership, pass off mundane administrative tasks to your ASO, and keep plugging along as a business.
It’s important to consider the pros and cons of both a PEO and ASO company in determining the kind of HR outsourcing that best suits your business.