What Exactly is a PEO?

Small to medium sized businesses across America are discovering the incredible value of PEOs. With increasingly complex employee related matters such as health benefits, workers’ compensation, payroll, unemployment claims and more, it’s no wonder the PEO industry is on the rise. But what exactly is a PEO and how can a PEO help YOUR business?

A professional employer organization (PEO) is a single source provider of integrated services which enable business owners to cost-effectively outsource the management of human resources, employee benefits, payroll, workers’ compensation and other specialized services such as recruiting, employee training and development. Clients of PEOs are able to concentrate on the operational and revenue-producing aspects of their businesses, leaving human resources management to the experts!

PEOs provide immense value to the client, including:

  • Relief from employee administration
  • A wide range of personnel management solutions
  • Professional assistance with employment-related problems
  • Access to comprehensive employee benefits package(s)
  • Improved employment practices, compliance and risk management
  • Up-to-date information on labor regulations, workers’ rights and safety regulations
  • Quality benefits and recruiting assistance to attract and retain the best employees
  • Improved cost control
  • Reduced turnover
  • Reduced accounting costs
  • Reduced liability
  • Better employer/employee communication
  • On-time and accurate payroll
  • Efficient and responsible claims processing
  • Professionally written employee handbooks, policies, procedures and practices
  • And more!

PEOs serve as one of the most efficient outsourcing options for businesses from many different industries. NAPEO (National Association of Professional Employment Organizations) states there are over 800 PEOs operating in 50 states. The industry has grown immensely as PEOs attract more diverse, fast-growth clients. Although the average client of a PEO is a small or medium sized business, larger businesses are increasingly signing up too!

In many instances, PEOs make the perfect partners, providing the improvements that are instrumental in gaining a competitive advantage. Many PEOs and clients develop long-term relationships because they allow clients to reduce costs and free up time to devote to revenue generating activities.

For more information on PEOs visit www.NAPEO.org. If you need help selecting the PEO that is right for your company, feel free to contact the PEO experts at PEO Advantage.

2 Responses

  1. Great info on PEO. We recommend that small businesses look at all their options when it comes to HR services, from simple payroll with pay-go workers comp, up to ASO, BPO and other total HR outsourcing solutions, like PEO.

    • ryan says:

      PEO Advantage couldn’t agree more. Thanks for your comment Kristian. PEO Advantage is one of a portfolio of expense reduction tools provided by FIRM Consutling Group (http://www.firmconsultinggrp.com/A1-BSO.html). While employee leasing and the PEO model can benefit a business owner by helping them take advantage of group based discounts for work comp, SUTA and employee benefits like health, dental and vision insurance, it is equally important to evaluate the need for individual services as compared to a bundle. It is for that reason that FIRM Consutling provides outsourced humna resources support through a product called HR Shield (www.HR-Shield.com.com), as well as stand alone payroll, employee benefits and administration services provided through our full service, in-house employee benefits agency.
      PEO Advantage clients have the opportunity to compare PEO services and pricing along side HRO, ASO and BPO in an easy to understand side-by-side analysis.

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