PEO ASO Very Much In Business

November 7, 2003
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GRAND RAPIDS — Conventional wisdom has it that professional employer organizations — companies that hire people for other firms needing the labor but not the hassle — had disappeared from West Michigan.

But that would be news to Patrick Montgomery, founder and operator of Employment Traditions, a PEO this year celebrating its tenth anniversary.

Montgomery founded the company as People First in Rockford.

What has since become Employment Traditions — and is now based in Caledonia — functions as an employer of record for any company that retains its services.

And in addition to the paperwork entailed in putting a worker on a payroll, Employment Traditions also can handle a package of some or all HR functions from benefits to safety administration and from training to workers’ compensation processing.

Pre-dating Employment Traditions by two years is Employment Traditions’ sister firm, HR Inc., an administrative service organization (ASO).

The ASO provides the same packages of human resources services as Employment Traditions — and uses the same staff to do it — but as an ASO, it does not act as the employer of record.

What has expanded the market for both firms has been the steady growth of state and federal regulations that relate to employing people.

The idea in the case of both organizations is to manage functions that many small and mid-size firms simply haven’t the staff to do for themselves.

According to Montgomery, most clients seek the services of an ASO or a PEO for one or more of several reasons:

  • To reduce or control operating costs

  • To remove distractions from company focus

  • To access specialists’ capabilities

  • To free resources for other purposes

  • To access resources not available internally

  • To accelerate re-engineering of benefits

  • To achieve rescue for a function or HR department that is falling behind or out of control

  • To share risks with other firms.

Considering the services either kind of company offers, it’s easy to see why some firms would need the help.

HR functions range across a rather broad gamut that has no direct impact upon production or service provision — from garnishment and Friend of the Court to keeping up with legal trends in complying with regulatory requirements of the alphabet-soup of state and federal agencies.

But though such tasks don’t directly impinge upon production or service, HR regulation is becoming more complex at an accelerating rate.

And no firm that needs a staff of employees can stay in business unless it can manage the paperwork requirements issuing from ADA, FMLA, MIOSHA, EEO, EAP and — atop all that — can also function by Congressional edict as the first line of defense of the U.S. Immigration and Naturalization Service in its attempts to stop illegal immigration.

Either that, or such firms must hire a company such as HR Inc or Employment Traditions to do the work for them.

Both HR Inc. and Employment Traditions also will undertake the due diligence required of hiring and recruiting: background checks, drug screening, keeping employee handbooks current and maintaining personnel records.

The staff of the two companies also tries to keep clients abreast of the times in other ways.

In its newsletter early this year, HR and Employment Traditions urged clients to be alert to overworked staff members’ concerns about job security and to engage in frequent and honest communications with them.

The two firms also touched recently on a weak spot in many companies: neglecting to follow up quickly in response to customer complaints.

“Research shows that when a business makes a mistake and recovers well, the customer perceives that the company has better customer service than if it never made the mistake in the first place.

“A lot of customers don’t go to the trouble to complain; they just leave,” the newsletter notes.

The newsletter stresses that when customers do complain, the company should treat that act as a blessing in disguise by quickly and apologetically acknowledging the error and then energetically redressing it.

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