THE DUAL HR MODEL: BUILDING STRONG PARTNERSHIPS BETWEEN PEOS AND CLIENT HR LEADERS

One of the most positive or perilous relationships between the PEO and their clients is that of the PEO’s HR SMEs, and the client’s internal HR contact. This can create ‘breakup paranoia’ on either end. Questions like, “what if they don’t need me because they can get everything from the PEO?” or “what if they don’t need the PEO because they have hired a new HR Director?” are common. The answer of course is, we are better together!

Let’s unpack what happens when a client organization also has its own HR professional. The reality is, the relationship can become complicated. Questions about authority, communication, style, culture and responsibilities can create friction if expectations are not clearly defined.

BUILDING STRONG PARTNERSHIPS

For HR professionals working within a PEO, building strong partnerships with client-side HR professionals is essential. When the relationship works well, the client benefits from expanded expertise and resources, employees receive consistent support, and the PEO-client partnership becomes more strategic and valuable.

There are numerous ways to cultivate these relationships. It starts with the client courting process and your business development team. When your sales savvy revenue generator first meets with a prospect, understanding the internal dynamics of the team can kickstart the conversation of how much HR infrastructure the business already has in place, and helps to outline the gaps, and what has and hasn’t worked well previously with their HR processes. Establishing what the business owner hopes to keep in place with their own HR contact, or hopes to change, is a crucial component in addressing any gaps or opportunities that the PEO can help to ensure are actualized. From there, your internal PEO HR service team can take the baton, setting up an initial meeting with any HR or HR related contacts at the client, to take the temperature of the professional they will be working with there. What is their level of experience? How receptive are they to the newcomers? How do they prefer to communicate, and where can we help versus allow them to continue their own great processes?

When PEO professionals frame their role as strategic support rather than oversight, it builds trust and reduces the perception that the PEO is trying to control the client’s workforce. From personal experience, having collaboration with other HR professionals is absolutely delightful. HR is often on an island of one, and having someone else to roundtable with, offer suggestions, and collaborate with can be a welcome change from the isolation that is often the profession of human resources.

INVEST IN RELATIONSHIP BUILDING, NOT JUST TRANSACTIONS

Often our client interactions revolve around administrative processes like payroll changes, benefits enrollment, or compliance documentation. While these tasks are essential, focusing solely on transactions can cause the relationship to feel mechanical, and lead your client company to question the value of a PEO vs. an ASO or payroll only service.

PEO HR professionals should take time to build genuine relationships with their client HR counterparts. This can include regular check-ins, learning about the client’s business model, their culture and team members, and understanding the challenges the client’s HR professional faces in their organization.

For example, an HR professional working for a manufacturing client will face very different challenges than someone supporting a nonprofit or professional services firm. We feel and understand this at the PEO. Industry context is crucial for us as the PEO to provide relevant and practical guidance. The PEO HR expert absolutely has to understand their audience and decompartmentalize their advice based on what might work in their own environment.

Strong relationships also make difficult conversations easier. If a PEO must deliver compliance warnings or advise against a risky employment decision, an established relationship helps ensure the message is received as helpful guidance rather than criticism.

CREATE CLEAR ROLES AND RESPONSIBILITIES

Another source of tension between PEO HR teams and client HR professionals is role ambiguity. Without clearly defined responsibilities, both sides may assume the other is handling a task, or they may duplicate work unnecessarily.

Successful partnerships often rely on a clearly documented division of responsibilities. This can include outlining which organization handles: Employee handbook development and updates; employee relations investigations; benefits communication; payroll corrections; compliance monitoring; and HR policy interpretation.

Establishing these boundaries early in the relationship prevents confusion and ensures accountability. Frequent check-ins and questions about how to best make the relationship work solidify the partnership. It also allows each party to focus on the work where they can provide the most value.

PEO HR professionals should also recognize that responsibilities may evolve over time as the client grows or adds internal HR capacity. Conducting periodic reviews of the partnership structure can help ensure that the division of labor between the PEO and client company remains effective.

COMMUNICATE IN A WAY THAT EMPOWERS CLIENT HR TEAMS

Rightfully so, client HR professionals often rely on PEO expertise for complex compliance issues, particularly in areas such as risky terminations, employee classification, and workplace investigations. However, our communication style can make as big of an impact as the information being delivered.

For example, instead of saying, “You can’t terminate this employee because it may be risky,” a more effective approach might be: “There are some legal risks associated with this termination because of the timing and documentation. Here are a few steps we could take to strengthen the file or alternative approaches we can look at.”

This approach lets them know you have their best interest at heart, and aren’t there to judge, forecast doom, or point fingers.

PEOs often lead employee strategy conversations with a focus on compliance and risk reduction because they share certain employment liabilities under the co-employment relationship. Business partners, however, may have different operational priorities or risk tolerance levels.

If you have an EPLI policy for each of your client companies (10 out of 10 can recommend), it is important to give a reminder of how the EPLI works in conjunction with any potentially risky terminations or employment decisions each time, and with each manager or owner that you are helping. Deliver options for them to consider, pairing the options with potential risk. Then, go through a roundtable exercise while exploring what is behind doors 1, 2, and 3. Listening carefully to the client’s perspective helps to find balanced solutions that protect the organization while allowing the business to operate effectively.

The relationship between a PEO and its client’s HR team is most successful when it functions transparently and as a true partnership. By respecting decision-making authority, building strong relationships, clarifying responsibilities, communicating collaboratively, and supporting the client HR professional’s role, PEO HR staff can significantly enhance the value they provide.

When PEO HR professionals and client HR teams work together with mutual respect and clear communication, the partnership becomes a powerful resource for both the client and the workforce they support.