PEO Comparison Report

Thomas Farrell HR Technology 0 Comments

Started at roughly the same time as Zenefits and headquartered in the same city, is online HR solution Namely. Funded by famous Silicon Valley venture fund, Sequoia Capital among others, they are setting their sights on being the foremost in the future of HR management, just like their  competitor, Zenefits.

 

Even though these two seem to be similar as the age old McDonald’s vs. Burger King argument, there are some differences that set Namely apart and why we thought having a Namely vs. PEO debate was only fair to have.

 

The Good Side Of The Namely Vs. PEO Debate

 

We’ll start with the positive points of Namely’s side of the argument. Their interface kicks butt. It even makes Zenefits look like a wallflower compared to Namely. The lineless page with clean images and spacing make it a beautiful design choice for those who may not be as technically savvy as other users.

 

Their claim is they built it with the user in mind, from the ground up. We’d say they achieved that. Nice work. Also, Namely’s company website is a whole lot better to get around than most.

 

They created a lot of features to help you manage HR online. If you want to really do a good job with upping your HR management game as a small business owner, this would help you do it. They offer partners, just like Zenefits, for you to sign up and work with them for employee benefits and payroll.

 

One thing they put a lot of effort into was employee skill and review tools for you to catalog the skill sets of your employees and create a way to do 360 reviews, all from their program. Which leads us to our next point….

 

3 Reasons Why Namely Isn’t The Best Choice Against A PEO

 

It is a nice looking, easy on the eyes tool. You can’t take that away from Namely. The one thing it won’t do is the following:

 

No Helping You With Lower Premiums – They can offer you about the same rates as any other insurance broker but what they can’t do is help you with rates and responsibilities for community rated health insurance pools. New York is one such state that has community rated health insurance regulations. The short explanation is for companies that have under 50 employees (and under 100 by 2016), they pay their rates based on a community rated pool. Everyone in the pool with an average employee age of between 25 and 55 is going to pay the same rates, regardless.

 

The trouble with community rated pools is, everyone is also paying for companies that have a high risk of defaulting on their premiums and also those who have a high likelihood of filing a lot of claims. It averages out so everyone is taking on the burden of the risk. There nothing that Namely can do to help you with that.

 

Using All Those Tools – They sure do have a lot of stuff to play with on their platform and you can really do a lot with HR if you use them all, but are you going to? This tool seems like it would be better suited for someone who is exclusively assigned to an HR role, not a small business owner. All the features distract you from realizing one thing; it will only help you as much as you use it. How much time are you dedicating to HR for your business now?

 

No Stake In Liability – Just like Zenefits, if their payroll partner fails to pay your payroll taxes, that is on you, not Namely. Namely, they are not going to take any responsibility if one of their partners is found to be irresponsible. If their partners raise their rates, go out of business, fail you in any way, that is not on them. They are simply making an introduction.

 

PEOs CAN SAVE 20-40% Plus Help With Legal Issues – Not only can they help save substantially on benefits they also assist with unemployment liability by paying into unemployment claims and dealing with litigation. Because they file your taxes under the PEO’s Tax ID number, they will help you fight an unemployment claim and issues with payroll taxes and the IRS.

 

And The Winner Of The Debate Is…

 

When it comes to Namely vs. PEO services, this is a major differentiator. PEOs can help you with community rated pool states like New York. They work differently because their setup up is a co-employer model. Even if you have a small 5-person company, because of co-employment, you are part of a much larger organization, opting you out of the community rated pool guidelines. You are free to pay your premiums without any risk of having to financially take on the burden of everyone else’s claims.
For a company that fits into the above criteria, a PEO service is a much more reasonable choice and certainly a safer one from a legal perspective. If you are searching for a HR Management solution, when it comes to Namely vs. PEO services, there is only one choice.

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