What Is Co-Employment, and Why Is It Necessary?

Many employers spend an inordinate amount of time working on payroll, recruiting and other human resource tasks at the expense of what truly matters—growing the business. If HR duties are keeping a business from being more competitive, a co-employment relationship with a professional employer organization (PEO) is a viable solution.

The National Association of Professional Employer Organizations (NAPEO) defines co-employment as the contractual allocation and sharing of employer responsibilities between a co-employer and its client employer.  In a co-employment agreement, the workers are technically employed by two separate entities:

  1. Co-employers, who handle personnel-related functions and supply services and benefits to a client employer and existing workforce.  Co-employers also manage employee-related aspects of business operation.
  2. The client employer, who maintains control of all business decisions and operations.

Why is co-employment with a PEO necessary?  Quite simply, time is finite, and every hour a business owner spends on a non-core activity like HR administration is time away from growing the company.  Research shows PEO clients grow faster, have higher survival rates, and experience less employee turnover. Outsourcing of everything that is not core to your business is a global trend that will ensure the success and, even more so, the growth of your business.

If gaining a competitive edge and growing your business through a partnership with a co-employer is your goal, contact CCPEO Consulting at 817-233-4551 or [email protected].