Certified Staffing Profesional Practice Exam

What type of service is responsible for processing payroll and providing benefits without involvement in recruitment?

1. Managed Services

2. Vendor Management System (VMS)

3. Professional Employer Organization (PEO)

4. Manager Service Provider (MSP)

The correct answer is: Professional Employer Organization (PEO)

The correct answer is that a Professional Employer Organization (PEO) is responsible for processing payroll and providing benefits without involvement in recruitment. PEOs streamline human resource tasks for businesses by taking on employer responsibilities, including payroll processing, benefits administration, tax filing, and compliance with labor laws. This allows companies to focus on their core business operations while ensuring that employee-related responsibilities are effectively managed. One of the key benefits of a PEO is that it enables businesses to offer competitive employee benefits, such as health insurance and retirement plans, without having to manage these functions in-house. In contrast, Managed Services and Manager Service Providers generally involve overseeing broader staffing functions, which can include recruitment among other services. A Vendor Management System (VMS) typically focuses on managing contingent labor and supplier relationships rather than providing payroll and benefits. While both Managed Services and VMS can support staffing needs, they do not specifically handle payroll and benefits in the same manner as a PEO.