Co-employment is the relationship between an employer and a firm specialized in employee leasing or a Professional employer organization (PEO).
Co-employment is the relationship between an employer and a firm specialized in employee leasing or a Professional employer organization (PEO). It includes the division of responsibilities for human capital management between an HR department and a PEO.
Advantages and disadvantages of Co-employment
Companies opt for co-employment to ensure they have qualified workers and to make it easier to hire industry experts. The PEO handles administrative and personnel-related activities while the employer controls their role in business such as daily job responsibilities.
Disadvantages of the practice include:
- unemployment potential increase due to a lowered need for labor
- confusion between two companies working with the same employee
- employees being unsure of whom they should speak to when a problem arises
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