What is a PEO?

Working with a PEO can help you take your business further.

Professional Employer Organizations (PEOs) exist to provide human resources services to their small business clients—paying wages and taxes, and providing compliance assistance with many state and federal laws and regulations.

PEOs often provide workers with access to 401(k) plans, health, dental, and life insurance, dependent care, and other benefits not typically provided by small businesses.

PEOs provide these services through a business-to-business relationship called “co-employment” wherein the PEO takes on many employee-related employer responsibilities, while the business owner continues to manage and run their business.

Typically, a PEO can manage more than just payroll, becoming a one-stop solution for many HR roles by combining payroll processing, benefit plan management and administration, recruiting and training, and more. This allows the business owner to focus on what they do best and spend less time managing Human Resource tasks.

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Grow faster and retain employees longer.

Businesses in a PEO arrangement grow 7-9% faster.

Businesses in a PEO have a 10-14% lower turnover.

Businesses in a PEO are 50% less likely to go out of business.

PEOs provide services to 175,000 small and mid-sized businesses, and 15% of all employers with 10 to 99 employees.

PEOs employ 3.7 million people.

Administrative costs are around $450 lower per employee for businesses that use a PEO.

Statistics from The National Association of Professional Employer Organizations (NAPEO)

How does a PEO relationship work?

Share responsibilities with your PEO through co-employment.

Your company enters into a contractual allocation and sharing of employer responsibilities with the PEO, commonly known as co-employment.

In a co-employment agreement, employees are technically employed by two separate entities: your company, whereby you control the daily duties and core job functions of the employee; and the PEO, that handles personnel administration functions.

You maintain control of all business decisions and operations while the PEO manages employee-related aspects of your business operation.

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