How does PEO work?

A PEO usually serves as an outsourced HR department that offers comprehensive employment services such as assistance with employer compliance, HR management, benefits, and payroll administration etc. A PEO normally serves as your strategic HR partner that can assist in:

  • Effectively minimize liability as well as exposure to risk
  • Create efficiency
  • Contain rising HR costs
  • Attract and retain talent
  • The PEO effect on a day to day business
  • When it comes to co-employment, the PEO usually becomes an employer of record for tax purposes. A PEO fills paperwork under its own identification numbers. So where do you stand as a business in this relationship? As a client company, you will continue to dictate or direct the employees’ daily activities. The PEO then assumes the responsibility for most of the human resources as well as payroll functions of the business. This goes miles in freeing you to spend or invest your time in the things that matter the most – building your company. PEOs can affect your business’ day to day operations in one way – by solely focusing on safety programs, workplace risk management, and excellent human resources practices.
  • For many businesses, either small or large, joining a PEO makes absolute sense. In addition to helping save substantial amount of time and money, PEO can also help mitigate liability. Joining a PEO membership will without doubt make hiring the next employee (s) a much better experience.