PEO Benefits: How to Grow With a PEO

A PEO benefits employers and employees alike, running payroll and HR administration with efficiency and expertise that support the company within its budget.

Bookmark (0)

No account yet? Register

benefits of outsourcing to a peo

Small business owners wear many hats in the earlier growth stages of their companies. Although that may appear to save money, it can actually be quite inefficient. In most cases owners don’t have the expertise, let alone the time, to manage all aspects of the business. Partnering with a professional employer organization, or PEO, benefits these owners, their employees, and the growth and stability of their organizations.

Simply put, a PEO is a full-service human resources outsourcing opportunity also referred to as co-employment. PEOs provide administrative tasks and support for payroll processing, benefits administration, strategic services, compliance, and other time-consuming HR functions. They come in various types and sizes, providing services to suit the needs of any business. Ultimately, PEOs can reduce expenses while eliminating some of the risks and liabilities of the employer.

Primary benefits of a PEO

PEOs can provide a small business with benefits that rival those of a large corporation’s HR and payroll administration department. They work closely with employers to administer necessary HR functions that need more than part-time attention and a high-level of expertise. Therefore, owners and management can focus on their core competencies of greater value to the long-term growth of the company. The range of services industry-wide generally touches every facet of HR administration. Here’s how.

Employee benefits packages

In most cases, a PEO can provide employee benefits packages otherwise unaffordable for small businesses. Sponsored plans can include group health and life insurance, dental and vision care, long-term and short-term disability coverage, retirement savings plans, and other group-discounted products and services. Business owners should also be aware of the differences in what PEOs vs. insurance brokers can offer and at what costs.

PEO benefits administration

PEOs handle all the administrative tasks needed to implement employee benefits packages. These include program enrollment, healthcare information, claims, appeals, IRS forms, Affordable Care Act paperwork and addressing compensation questions.

Workers’ compensation

Costly and time-consuming insurance premiums and claims-management are eliminated with a PEO. They can provide coverage to employees through their own workers’ compensation insurance programs. They can also provide the necessary compliance, audits, paperwork, and certifications needed. In addition, PEOs can recommend best practices for industry-specific workplace safety, lowering a company’s exposure, risk, and liability.


Fast-paced and always changing, recruiting requires focus and time to ensure high-quality results. Online recruitment platforms may help by initially connecting employers with applicants. But the deep dive to find and vet qualified and capable candidates goes beyond what online job postings can offer. Placing job ads, providing background checks, interviewing candidates, analyzing interviews, and other important details of recruiting are all part of what a highly professional and dedicated PEO team can supply. They are also cognizant of best hiring practices and applicable state employment laws when enrolling new employees.

 Human resources

Business operations can be hindered by administrative tasks that divert focus away from important work that would better serve the company. This issue is especially prevalent in companies that lack the HR staff and resources that a large corporation can deploy.

Hence, the trend toward outsourcing HR administrative duties to improve both company performance and bottom line is growing. Professional employer organizations provide a full line of HR services. Responsibilities such as benefits compliance, employee onboarding, employment regulations, employee training, and other HR tasks and demands are managed by seasoned HR professionals on the PEO’s HR team.


Payroll administration is one of the most outsourced business functions due to the overall savings involved. But there’s a difference between working with a PEO vs. standard payroll services provider.

In the co-employment relationship between the business and PEO, PEOs accept the responsibility and liabilities of processing payroll, reporting and remitting payroll taxes, and more on behalf of the company.

Furthermore, payroll processing, withholdings, W-2s, and garnishments can all be automated to provide efficiency and high accuracy while reducing costs. And quarterly and annual payroll reports and other relative data can be easily generated by the PEO services.

Employee management

PEOs deliver comprehensive HR solutions to employee management that can drive increased employee engagement and a better overall employee experience. Many provide dynamic online dashboards for access to useful information and materials. These can include employment and tax forms, leave-request forms, training content, and answers addressing general employee issues. They can develop a print and/or digital employee handbook clearly defining company policies and procedures to improve business operations and help prevent conflict.

PEOs are also well qualified to objectively manage employee complaints, providing experienced expertise to ensure appropriate and lawful conduct.

Lawsuit and liability management

Avoid potential lawsuits and negative PR through the services of a PEO. They share liabilities associated with claims such as wrongful termination and other such legal issues. The best PEOs have equal opportunity specialists well-versed in all aspects of discrimination laws. With multiple experts who can help avoid or mitigate a costly legal issue or settlement, this benefit alone might be worth the cost of a PEO.

Partnering with a PEO can make all the difference in scaling and managing growth. They relieve employment-related risks and administrative responsibilities. They provide a high level of expertise in various areas of business that might be more costly to staff. A co-employment relationship with a PEO not only can save time and money. It can also expand the ability of a small company to attract and retain high-level employees with offerings aligned with those of larger organizations. A professional employer organization provides superior benefits to the employer and employees alike. Ideally, this ultimately improves the level of service provided to clients and customers.

Bookmark (0)

No account yet? Register

Might also interest you