FAQs

A Professional Employer Organization (PEO) is a company that partners with businesses to handle various HR-related functions, such as payroll, benefits administration, compliance, and risk management. By entering into a co-employment relationship, the PEO takes on many administrative responsibilities, allowing business owners to focus on growing their company.

In a co-employment relationship, both the business and the PEO share responsibilities for employees. The business retains control over day-to-day operations and core business decisions, while the PEO handles administrative tasks like payroll, HR compliance, employee benefits, and workers' compensation. This shared relationship allows for efficient HR management without losing control of key business functions.

Partnering with a PEO allows businesses to streamline their HR functions, reduce administrative burdens, and gain access to better employee benefits and compliance support. PEOs provide cost-effective solutions for businesses by leveraging group rates for healthcare and workers' compensation, as well as helping to mitigate risks associated with employment laws and regulations.

The business maintains full control over its employees in terms of job duties, performance management, hiring, and firing. The PEO, meanwhile, handles HR administrative tasks, such as processing payroll, administering benefits, and ensuring compliance with regulations.

The business maintains full control over its employees in terms of job duties, performance management, hiring, and firing. The PEO, meanwhile, handles HR administrative tasks, such as processing payroll, administering benefits, and ensuring compliance with regulations.

PEOs are beneficial for businesses of all sizes and across a variety of industries. Small to mid-sized businesses, in particular, benefit from PEO services as they often lack the internal resources to manage complex HR tasks effectively. By outsourcing these functions, businesses can focus on growth and strategic initiatives while ensuring compliance and improving employee benefits.

In many cases, working with a PEO can save businesses money by reducing administrative overhead, improving efficiencies, and offering access to more affordable employee benefits and workers' compensation plans. The cost savings often come from the PEO's ability to leverage its size and resources, providing businesses with greater value.

Yes, many PEOs offer flexible solutions that allow businesses to keep their current benefits packages if they are satisfied with them. However, PEOs also provide access to enhanced employee benefit plans, often at lower costs due to the group purchasing power of the PEO.

While both PEOs and outsourced HR services provide support for HR functions, a PEO creates a co-employment relationship with the business, taking on liability and responsibility for compliance, taxes, and other HR-related matters. Outsourcing HR typically involves contracting specific services without the legal and compliance benefits of co-employment.

PEOs stay up to date on federal, state, and local employment laws and regulations, ensuring that businesses remain compliant. This reduces the risk of costly fines and legal issues related to HR practices. The PEO handles tasks like payroll tax filings, workers' compensation claims, and employee benefits administration, ensuring full regulatory compliance.

Yes, PEOs can help improve employee retention and recruitment by providing businesses with access to competitive benefits packages and a more efficient HR process. This makes it easier for businesses to attract top talent and keep their employees engaged and satisfied.

A PEO delivers services to its customers through a shared tax ID; this model is referred to as a “co-employer” or “co-employment” relationship. Companies working with PEOs retain complete control over operations, workforce management, building company culture and defining the employment brand. The service provided by an ASO does not establish a co-employment relationship. The ASO does not process payroll and remit and report taxes under its own FEIN, nor can it provide access to benefits as a sponsor of a benefits plan. The client company remains the sole sponsor when working with an ASO.

Higher Growth Rate: Companies that use a PEO grow 7-9% faster than businesses that do not use a PEO. This is largely due to the administrative support and streamlined HR processes that free up time for companies to focus on growth and strategy.

​

Lower Employee Turnover: Businesses partnering with a PEO experience 10-14% lower employee turnover rates compared to companies that manage HR in-house. PEOs help improve employee satisfaction by offering better benefits and a more efficient HR experience.

​

Cost Savings: On average, businesses save 27.2% in HR-related costs by working with a PEO. This is due to reduced overhead, access to group insurance rates, and the efficiency of outsourcing administrative tasks like payroll and benefits management.

​

Improved Survival Rates: Companies that use a PEO are 50% less likely to go out of business compared to those that don’t. This statistic highlights the significant impact that PEOs have on long-term business stability by ensuring compliance, managing risk, and providing high-quality HR services.

​

Increased Job Creation: Businesses that work with PEOs are 4% more likely to increase employment year over year, thanks to the operational efficiencies and enhanced employee retention that PEO partnerships provide.

​

Better Benefits Access: Through a PEO, small businesses gain access to Fortune 500-level benefits, including health insurance, retirement plans, and other employee perks. This gives smaller companies a competitive edge when recruiting and retaining top talent.