What is a PEO?

A professional employer organization (PEO) provides necessary HR functions for small to medium businesses without the resources or bandwidth to manage it on their own.

It can act as an extension of businesses, providing training for supervisors, helping to develop policies, managing payroll, benefits, HR, tax administration and offering regulatory compliance assistance.

A PEO functions like an off-site HR department for your organization. It can provide written materials like handbooks and job descriptions, assist with training staff, assess job candidates, help with employee disciplinary matters and consult on nearly any employment-related issue.

Why use a PEO?

Business growth makes human resources more complex and time-consuming. Without expert assistance, companies can find themselves spending more time on HR administration than they do on revenue-driving activities. The economies of scale provided by a PEO gives companies access to benefits and resources they would be unable to afford on their own.

Most companies don’t have the means or expertise to anticipate the many HR issues that can arise, but PEOs are equipped for every challenge you may face and can assist in:

  • Establishing policies and procedures that prevent incidents from occurring.
  • Developing risk management resources.
  • Offering scalable and affordable payroll and benefits.
  • Improving recruiting and retention by offering better services and support to employees.
  • Ensuring your company remains in compliance with every changing HR regulation.
  • Freeing your organization to focus on growth and profitability.
  • Providing management training and support to improve hiring, performance management and retention of key employees.

What are PEO Services in Human Resources?

Reduce employment risks. Businesses face multiple risks including workers’ compensation claims, employee litigation and employee misclassification. Excessive or mismanaged claims and lawsuits can result in lost time and money and lowered employee morale.

A PEO keeps you compliant with employment laws and regulations, reducing your financial risks and helping you protect your assets.  

Eliminate wasted time. Spend too much time and energy on administrative tasks like payroll processing, benefits administration and safety programs and you’ll lose focus. It’s frustrating to know time that must be spent on these details distracts you from revenue-generating and growth activities.

A PEO takes over many time-consuming administrative functions, so you can concentrate on running your business and protecting your bottom line.

Control employment expenses. Costs such as workers’ compensation insurance, unemployment insurance, payroll processing and group health insurance can really cut into your profitability. Lack of expertise in managing these areas can result in fines, penalties and litigation as well as rising rates and needlessly excessive costs.

A PEO’s expertise and buying power can reduce your employment costs, while providing access to better employee benefits.

Provide better benefits. Attracting and retaining the best people often comes down to the benefits you offer. Keeping your people happy can help prevent talent shortages and turnover headaches. For small to medium businesses, the monthly cost of a comprehensive, ACA-compliant benefits program can be enough to put them out of business.