HR Expert Explains PEO and How Does It Work For Your Business

by | Jun 8, 2022 | Professional Employer Organization

I usually have clients from international companies that want to expand in the global market. Most of them have little idea about Professional Employer Organizations (PEO) and how they can leverage its benefits.

I’m writing this article to help decision-makers and other HR practitioners to understand PEO in all the aspects that concern them.

The main reason organizations employ PEO providers is to facilitate HR duties for their distributed teams. It also aims to lessen the burden of their in-house HR department and allows them to focus on other parts of business operations.

Indeed, PEO is a co-employment relationship between the client company and the PEO service provider. It means that companies deploying PEO keep complete ownership or control of their business. At the same time, the PEO provider manages employment-related areas like payroll, HR administration, taxes associated with employment, and other statutory labor regulations.

However, there’s more to PEO services than what I’ve mentioned above.

Here are some of PEO advantages:

Reduce Liability

PEO service providers assist businesses with specific employment difficulties, such as payroll issues and regulatory compliance. Most of the time, PEO provide legal and administrative help to their clients.

Hence, PEO services can reduce your company’s liability to your distributed workforce. It may protect you from employment litigation as the PEO is the legal employer of your team on paper. Moreover, PEO can safeguard you from tax liabilities and other compliance issues that may occur.  Hence, it makes it easier for companies to comply with different HR and labor requirements.

Facilitate Rapid Global Expansion

Empowered by globalization, enterprises big and small outsource their human resource management to a PEO. By doing so, they focus on their primary missions, increase productivity, and come up with new revenue streams.

Hence, without daunting HR duties on their plate, businesses may develop more quickly by retaining talented individuals and focusing on deliverables and customer acquisition.

Industry and Local Expertise

While most PEOs are generalists on their customer base. Others specialize in specific locations and industries. PEO’s local expertise can help you expand your business horizons to lucrative global markets. It ensures complete compliance with ever-changing labor laws and regulations.

Boost Workforce Performance

A PEO assists businesses in developing and implementing effective employee performance evaluations. It may involve assisting with employee assessments, teaching managers and supervisors how to conduct evaluations, and providing tools to employees to help them set personal objectives and progress within the firm.

This is a part of the learning procedure to improve workforce retention. PEO also conducts online development courses to increase productivity and protect the well-being of employees.

Provides Viable Options of Services

As I’ve mentioned earlier, PEO provides the complete range of HR outsourcing services and employee benefits that you need. However, some PEOs go the extra mile by conducting seminars, training, and platforms for employee development.

Moreover, aside from payroll, tax compliance, and HR duties, some PEOs offer other viable options like visa processing for your foreign employees.

Competitive Employee Benefits

One main purpose of PEOs is to deliver cost-effective employee benefits to enterprises and businesses. They can provide extensive benefits packages at reasonable rates. They frequently combine the employees of the various firms they represent to bargain for lower coverage costs, such as medical, dental, and life insurance.

They will manage paperwork, perform audits, and answer employee queries about workplace incidents as they act as a contact center, where employees can ask about concerns about insurance and get vital clarification on specific benefit packages.

How to Select an Ideal PEO Provider 

PEO co-employment management model provides certain liberties to enterprises worldwide to focus on business growth activities rather than devoting their time to HR duties.

There are no hard and fast rules in selecting the ideal PEO service for your company.

If you’re looking for a PEO to manage your distributed teams make sure that their services match your current and future demands.

If you’re recruiting an international workforce, you could find a PEO’s visa application and monitoring system useful.

Similarly, firms that have significant employee turnover, may find PEO to address their problem.

Focusing on these fundamental concerns can help you get closer to a solution. Consider these considerations while looking for a business partner.


Create a working budget when you’re considering having a PEO. There are isolated cases where service fees are higher than any benefits and cost savings if left unchecked.

Moreover, PEO prices may differ depending on the size of your team, industry, and location.


Choose a PEO who provides reliable and real-time status about your workforce payroll data. An ideal PEO submits individual payroll, tax, and claim history to the government agencies and their clients.

User-Friendly Systems

PEO who have user-friendly systems may have better collaboration and communication with their clients. Preferably, choose a PEO that uses a cloud-based system and a hands-on C-suite so that you can monitor and communicate urgent changes on your service package among other things.

Visit our blog page and reach us if you want to learn more about PEO and EOR services.

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