Are HR workflows a pain point for your business?

Do you feel bogged down by all of the payroll, benefits, and HR administrative duties? If so, you’re not alone. HR is one of the most complex, nuanced, and critical components of your business — and finding the time to deal with all of those HR headaches isn’t easy. You have a business to run, people to manage, and decisions to make.

So, when it comes down to picking the right employee benefits package or navigating the rocky terrain of HR compliance, you’re at a loss. Even if you have an internal HR team, they don’t always have the tools, resources, or expertise to handle some of your more complex HR needs. Fortunately, there’s a solution:

Professional Employer Organizations have been helping companies build better HR practices for decades.

Here’s how they work.

Understanding PEOs

Professional Employer Organization (or PEO) is a cost-effective HR outsourcing solution that leverages co-employment to provide a wealth of HR solutions to businesses. A core function of PEOs is providing benefits for employees (e.g., dental, life insurance, health insurance, etc.) as well as payroll, workers’ compensation, and other administrative HR work. PEOs can also assist with tax filings and keeping your company compliant with all state and government regulations — which often overburdens small businesses.

One of the reasons that PEOs are hyper-effective at managing key HR issues such as benefits is through the use of co-employment — a business tool that gives PEOs the wiggle room to impact every layer of HR.

Breakdown of PEO Providers' Benefits

Co-Employment Explained

When businesses first hear the term “co-employment,” it sounds a little daunting. After all, you built your business from the ground-up; why would you hand the reins over to someone else?

PEO Providers and PEO Broker

It’s important to realize that a PEO is only acting as an administrator of HR duties and responsibilities — not everyday business management. So, you will still be in control of managing your business and your employees. PEOs focus solely on employee-related responsibilities. And, co-employment has the added benefit of giving your legal employer responsibilities to your PEO partner — allowing the PEO to save you time and resources and allowing you to only deal with issues that are mission-critical for your company and your employees.

There are plenty of advantages to co-employment. Think of it as a business tool giving you the freedom and flexibility to assign critical tasks to a consulting body. You, as the business owner, still retain the rights to hire and fire employees, and you still run the day-to-day business processes.

Benefits of PEOs

A PEO can be a critical driver of business success. They can help you stay compliant and reduce risk — which can help you relax and focus on other business needs.

PEO Broker Breaking Down Cost Comparison
Companies that work with PEOs grow 7 - 9% faster than those who don't.
Best PEO Consultant Explaining Services
Businesses with PEOs have 10 - 14% lower turnover rates.
Money Daved by PEO Broker in Piggy Bank
PEOs can help reduce business healthcare benefit costs by up to 39%.
Profit Growing Through Efficient HR Regulations and Policies
Businesses who use PEOs grow 2x faster than equal size businesses in their industry without a PEO.

Let’s look at some of the core benefits of PEOs:

Employee Benefits

Your benefits are the lever that unlocks better hires. 43% of leading companies have improved their benefits over the past year. And, over 15% of employees actively looking for another job site benefits as a driving factor. For small businesses, finding competitive benefits can be draining. Buying benefits through a broker is expensive — and you only have the buying power of one small company.

With a PEO in your corner, you have the economies of scale to purchase hyper-affordable benefit packages that are typically reserved for larger corporations. Not only does a PEO help you achieve better prices on health insurance and other benefits, but they can help you offer a larger suite of benefits to your employees.

These benefits include:

health plans
Health plans (e.g., individual, group, HMO, PPO, etc.)
Life insurance
Short-term and long-term disability insurance
flexible spending accounts
Flexible spending accounts
Various education benefits
and more!

There are hundreds of nuances involved in picking benefits. PEOs help you traverse these nuances with key benefit partnerships and a deep understanding of the current benefits landscape. 

Summary: How Do PEOs Help With Employee Benefits?

PEOs use up-to-date industry insights and economies of scale to partner with key benefit carriers that meet the needs of your current (and future!) employees.


No! PEO co-employment gives a PEO the ability to manage backroom HR functions like payroll and benefits while you maintain control of job functions, employees, hiring, firing, etc.

Typically not. PEOs will align with your HR staff to inform and promote better HR practices, but they are not an internal HR replacement. Some small businesses leverage PEOs as their sole HR staff. But, that’s few and far between. The healthiest PEO relationships are typically built between in-house HR staff and PEOs. Remember, PEOs can handle many of the day-to-day business processes, but you’ll still be in control of your in-house team — which includes hiring and firing rights.

One of a PEO’s primary jobs is assisting you with compliance and risk. But, you, as a business, are ultimately responsible for any compliance issues. PEOs are there to help you stay compliant — not shelter risk.


Finding the Right PEO

Finding a PEO is a complex process. First, you need to look for PEOs in your area that understand your business. Then, you have to find the right fit. Some PEOs will advertise incredible cost-savings, but that often means that they provide lackluster coverage. Most businesses will want to choose a PEO that’s capable of handling their unique needs and has the coverage options that make sense for their employees.

It’s important to remember that PEOs can offer different services as well. Some PEOs will offer digital tools for employees, while others may not. Each PEO is a unique entity that has a blend of services and offerings.

Without proper comparison tools, understanding the pros and cons of each PEO is certainly difficult. But, once you do arrive at a PEO that you like, you’ll need to ask some key questions to see if they’re the right PEO for your business.

Here’s a checklist.

The PEO Checklist

Let’s be honest. You don’t want to be the first patient a new doctor sees, and you’re probably going to do some vetting before you hire a babysitter. You should treat your PEO the same way.

Here is a quick checklist of questions you should be asking.

PEO co-employment

While that checklist and some searching may garner a few qualified candidates, you still have to think about which one offers the best Service Level Agreement, how they operate, and whether or not they are the best possible fit. This means going back through that process a few times and slowly eliminating potential PEOs.

Free PEO Comparison Report

Are you looking for that perfect PEO but you’re overwhelmed by your options? Don’t worry! We can help! At PEO Consultants, we help businesses find PEO support through our multi-tiered PEO selection process. Check out this Free Comparison Report to see which PEOs may be best for your unique business needs.

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