Hiring an employee-leasing company
By Pat Curry • Bankrate.com

Hiring a professional employer organization is a big decision. You're doing much more than just jobbing out your human resources function -- you're taking on a legal partner and creating a co-employment situation.

Frank Seibert, director of the Small Business Development Center at the University of Missouri, strongly urges companies to investigate the professional employer organizations they are considering. Ask for references, and ask those clients about the employee-leasing company's effectiveness and reliability. Do the employees get paid on time and in the right amount? How are problems handled and what's the company's track record for resolving complaints?

Also, ask whether the company will be able to provide benefits you can't offer, Seibert says, and whether using the company will lower your worker's comp insurance. Can the company do training on topics such as safety and harassment that you can't provide?

Kathryn Cunningham, owner of MORESOURCE Inc., in Columbia, Mo., suggests asking for the name and phone number of the IRS employee with whom the company deals, and ask that person for information on the last audit period. Get the company's contacts at the state's revenue and insurance departments and ask about its track record with worker's comp and unemployment compensation.

"There will be fewer companies that are willing to give you that," she says. "But if you're planning to turn over that much to a PEO, you have to make sure it's above-board."

Pat Curry is a freelance writer based in Georgia

-- Posted: July 1, 1999