PEO Insider Issue

A PEO is only as strong as its client relationships. From ownership to worksite employees, we need to be engaged at every level of our clients’ teams. Of course, strong connections between owners and executives build trust that is needed to develop successful relationships. Also, the quality of service we provide to worksite employees is essential to the PEO model being successful. However, it’s often the relationships between our HR/client service managers and the clients’ own supervisors and personnel managers that have the greatest impact on our effectiveness, efficiency, and ultimately, our bottom line. There are examples in nearly every aspect of our service that outline how this dynamic can mean the difference between a profitable client and one that prevents you from growing. 

When working with small businesses, it is common that the business owner themselves serves as the primary contact and worksite manager to the PEO. However, there are several hurdles with this setup. While the idea of allowing the PEO to take the administrative and HR burdens off the owners’ plate is one of the reasons they pursue our services, it is not always that simple.  

Many business owners have developed policies and practices that they may be reluctant to change, even after being informed of the legal and practical implications of why such change is needed. Facing this challenge, we always want our HR managers to keep the mindset of the business owner, to be able to empathize with their situation regarding a new law and how that will affect their operations. At the same time, it’s important to help develop new practices for the client to be compliant. If not handled correctly, a PEO can spend an immense amount of time cleaning up after the issues caused by some clients’ lack of understanding.  

It’s important that HR and recruiting managers understand some of the opportunities for development in their worksite manager relationships. For example, over the past few years, the most common request we hear from clients is for new applicants. When looking at staffing services, its easy to highlight the difference between an effective and ineffective client relationship.  

Let’s be honest, there’s nothing more frustrating than fielding calls from clients needing employees, only for the applicants supplied to be denied by either slow responses, outdated practices, or narrow selection processes. When factoring the cost of job posting, the time of your staffing associates, and the potential loss of quality applicants, it can be extremely detrimental to profit efficiency when the recruiting cycle is handled poorly. Many times, this inefficient cycle comes down to the effectiveness of the connection between the recruiter and worksite manager.  

Managers who do not respond to applications quickly, don’t host quality interviews, or provide feedback on applicants will hurt both the client and PEO. However, tight communication and responsiveness with the worksite manager will lead to a quicker applicant-to-hire cycle, making the operation more profitable. Honest conversations such as how slow response times lead to a bottleneck of applicants, how to conduct better interviews, and initiate the onboarding process can help a worksite manager improve their business’ hiring success. A strong relationship between the PEO and client makes honest conversations possible.  

One of the biggest opportunities for improvement with many small business clients is their new hire training. If the PEO can effectively help the client implement better onboarding practices, this will open up the recruiting target. By knowing they can properly train an employee, businesses are open to a wider selection of applicants, as opposed to needing someone to bring a particular skill from day one. In the increasingly competitive recruiting atmosphere, a PEO can help its clients implement long-term hiring solutions to stay a step ahead. Without strong relationships, a client will be much more reluctant to trust the development of long-term solutions in lieu of quick fixes. 

For medium-sized businesses, the challenge becomes managing the relationships between the clients departmental and mid-level management. The PEO’s HR team can easily become embroiled in inter-departmental conflict if it becomes too reactive in its service. Coaching managers on how to cooperatively lead their staff on the front end will lead to less issues needing to be addressed later.  

Again, this comes down to the HR team being able to have honest and sometimes difficult conversations with managers about how they need to improve. The business owner chose to partner with a PEO to see the overall health and success of the business’ employee relationships improve. The PEO cannot do that by always being in adherence to worksite managers. There is a fine line between working with and working for the worksite managers. HR managers need to have the confidence in their expertise to make onsite managers understand where there is opportunity, while developing real relationships so that the message is received.  

It is our responsibility to help clients understand the importance of our services to the overall success of their business. The more engaged the business owner is with the PEO service, rather than just a passive reliance, the more effectively we will be able to rollout improved processes. By creating a true partnership with clients, providing PEO services will feel more like skiing downhill instead of swimming upstream. 

SAM RATHBUN General Manager KEENA Queensbury, NY