PEOs enable small businesses to attain insurance and other ...

[ENagel]

PEOs enable small businesses to attain insurance and other benefits at lower costs because the PEO absorbs the small company's employees into a larger insurable group.
 
  Indicate whether this statement is true or false.

Question 2

What types of HR-related risks are faced by most small businesses? How can PEOs help small firms with these risks?
 
  What will be an ideal response?

[olderstudent]

Answer to Question 1

Answer: TRUE

Answer to Question 2

Answer: A lack of attention and expertise regarding HR means that most small businesses face certain risks. First, small business owners run the risk that their relatively rudimentary human resource practices will put them at a competitive disadvantage. Second, there is a lack of specialized HR expertise. In most larger small businesses, there are at most one or two dedicated human resource management people responsible for the full range of HR functions, from recruitment to compensation and safety. This makes it more likely that they'll miss problems in specific areas. Third, the smaller firm is probably not adequately addressing potential workplace litigation. Fourth, the small business owner may not be fully complying with compensation regulations and laws. Fifth, duplication in paperwork leads to inefficiencies and data entry errors. A professional employer organization (PEO) can minimize risks for small firms. These vendors range from payroll companies to those that handle all an employer's human resource management requirements, such as paperwork, benefits, and legal compliance.