Risks and Benefits Of Outsourcing Employees

An article in Today’s General Counsel examines the significant benefits and potential problems and complications that come with what’s being called The Professional Employer Organization. The PEO is a business that provides resources that function like a pool of employees but are on the books of the PEO. The model has gained currency, as more businesses conclude they should keep in-house only core functions that are critical to their differentiated competitive advantage, while outsourcing support activities like IT and HR to specialized providers. Among the issues to be considered are tax and benefit laws and non-disclosure agreements, which could be crucial for many businesses. It may be possible to have the best of both worlds, say writers Thomas M. White from the Rimon law firm, and Mark Rosenman of the Newport Board Group, by utilizing the advantages of the PEO while having, in-house, “a core of talented, dedicated permanent employees who share a compelling vision of the company mission, understand what differentiates it, and can drive its competitive advantage.”