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What is a PEO?

What is a PEO? In short, a PEO is an outsourced service company that coordinates the employment of your employees. They charge you a flat fee each month so you can focus on running your business.

Are you looking for expert service to ensure compliance is being met at all levels of your organization? That’s what a PEO specializes in: designing and administering benefits, human resources, and employment solutions that will allow you to focus on what’s most important – running your business.

What is the meaning of a PEO?

A good thing to understand before working with a PEO is what the acronym stands for. PEO is short for Professional Employer Organization.

For small and mid-sized businesses, hiring a PEO to handle benefits, HR, payroll, unemployment, and more is a recommended option. As all businesses are still dealing with coronavirus, PEO clients during the pandemic are 58% less likely to have permanently closed and 82% more likely to have operations back to normal, or better.

PEOs Empower Businesses

Outside of pandemic years, businesses who utilize a PEO grow 7-9% faster than those who don’t and are 50% less likely to go out of business.

Simply put, PEO clients experience much more growth and success than typical businesses:

“From 2008 to 2020, the number of WSEs employed in the PEO industry grew at a compounded annual rate of 7.6 percent. This is 7 percent higher than the compounded annual growth rate of employment in the economy overall during the same period,”- The National Association of Professional Employer Organizations (NAPEO)

PEO Services

PEOs employ roughly 4 million people and provide services to 173,000 small and mid-sized businesses. Currently, there are 487 PEOs scattered throughout the country.

Typically, PEOs provide the services mentioned above, but some have adapted to provide marketing, business coaching, recruiting and staffing, and even video production services to their clients.

Most, if not all PEOs provide HR services for their clients. Some even offer an onsite HR professional, however this is not the norm. Typical HR services include:

  • Unemployment claims

  • 401(k)

  • Handbook development

  • Internal & external training(s)

  • PTO

  • Grievances

Working with a PEO also gives your organization access to benefits and packages that small businesses typically do not have access to, such as:

  • Health insurance

  • Dental/vision care

  • Life insurance

  • Retirement saving plans

  • Job counseling

  • Adoption assistance

  • Educational benefits

Payroll is another area where PEOs can help save money and headaches. Typical payroll services include:

  • Direct Deposit or pay card

  • Multiple time and attendance options

  • 940 & 941’s filings

  • W2 Processing

  • Job costing

  • Certified payrolls

  • Industry Specific payroll related issues or tax credits

Risk and safety departments assist with background screenings, trainings, drug tests, as well as:

  • Onsite safety inspections

  • Industry specific training

  • OSHA 10- & 30-hour certifications courses

  • Toolbox talks

  • Customized Safety manual

  • Claims management

  • Development of Safety Incentive program

How do I hire a PEO?

Most businesses do not already have existing of PEOs, which leads them to blogs like this one!

Generally, businesses find about PEOs through word of mouth or from the organizations cold calling businesses directly. However, there are large corporations such as ADP or Paychex that provide widescale PEO services. If you are looking for something more local, visiting NAPEO’s site to find a PEO in your area is a good first step.

What if I'm looking for a PEO in Texas?

HR Service Partners represents PEOs in Texas and around the country if your business is actively looking for an organization to work with.

Reach out to us by calling (210) 905-4372 or visiting the “Get Started” tab on the top right of our site and schedule your free consultation today.

PEO Takeaways

By working with a PEO, you are improving your businesses HR, payroll, and benefits processes through strategic outsourcing. In addition to relieving your organization of these time-consuming processes, you provide yourself and your employees with a safety net during unprecedented times.

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