When it comes to getting assistance for some or all of your HR functions, you’re going to be faced with a number of options, each with their own advantages and disadvantages. Both PEOs (Professional Employment Organisations) and ASOs (Administrative Services Organisations) are organisations that assist businesses by taking on their specific HR functions, which ultimately helps to alleviate expenses and save on resources. An ASO or PEO both serve unique purposes and are different in how they operate.

What is a PEO?

A PEO (Professional Employment Organisation) offers HR services like payroll, compliance and workers’ compensation. Companies like Australia PEO achieve this by becoming the official employer of record for companies. This model is often referred to as co-employment.

When a company signs with a PEO, they’ll quickly find that a lot of the stress of HR is alleviated, giving them more time to concentrate on the day-to-day movements of their staff. The PEO is still required to abide by relevant employment and tax law.

What is an ASO?

 An ASO or Administrative Services Organisation is a similar sort of set-up to PEOs in that they provide HR services to companies, but they do vary in various areas.

One main point of difference between an ASO and a PEO is that an ASO doesn’t take on the role of employer of record for client companies’ staff, whereas PEOs do. ASOs don’t act as an extension of the business, rather a vendor. Unlike client companies in a PEO partnership, ASO clients retain all employment-related risks and liabilities, while the ASO simply performs the required services. Having said this, though, it’s common for an ASO to offer consultation services when it comes to legal, compliance and employment law.

ASO or PEO | which one is best for your business? 

Even though there are intrinsic differences between a PEO and an ASO, they can and often do offer similar services.

Your decision to go with an ASO or a PEO will depend mainly on how much involvement you wish your service provider to have with the business. If you want to retain your staff members’ official employment for whatever reason, then an ASO might be the service for you. If you need expert advice and assistance in your HR department, where you can learn from and entrust a service provider to take on much of the regulatory responsibilities and obligations of employing, then a PEO could very well be the most suitable option.

Australia PEO is the perfect option for companies who need assistance with some or all of their payroll functions, mitigate their risk and liability and benefit from significantly lower overheads. Another attractive benefit of partnering with a PEO is that they shoulder the load of your risk and liability.

An ASO can often be the right option for companies who want to remain the official employer of record for their staff. This is because an ASO functions as a completely separate entity to the business, performing tasks as needed as a way of filling internal capabilities gaps. The client company also maintains complete liability of their staff, which can be risky if the ASO were to make an error in compliance.

How can a PEO help your business expand into Australia successfully?

At Australia PEO, we’ve made it our mission to take as much stress out of expanding and employing in Australia as possible, by taking on much of the responsibilities and obligations associated with the hiring process. Speak to us today about how we can help you employ in Australia compliantly and efficiently.