top of page
  • Writer's pictureHCM Unlocked

What is a PEO?

PEO is the acronym for Professional Employer Organization. As trusted business partners for small and medium size employers, PEOs deliver cost-effective, outsourced services for human resources, payroll, benefits administration, and risk management. Many PEOs also offer expanded HR services like time and attendance, recruiting, employee training, and performance management.




The business of being an employer is hard work—and it’s time consuming. Mounting regulations from federal, state, and local governments are increasing administrative burdens on businesses of all sizes.

Many small and medium size business owners don’t have the expertise or staff to cope with all their HR duties, regulatory requirements, and risk management issues. For them, partnering with a PEO changes everything.

The biggest problem a PEO solves is giving business owners time and energy to focus on the missions of their businesses. The amazing result is that PEO clients are known to grow 9% faster than their peers.


When you partner with a PEO, you eliminate all the challenges and expenses of managing multiple vendors. As your business partner, your PEO will be able to anticipate your needs, present solutions tailored to you, and limit your exposure to employment risks.

Most PEOs have sophisticated online self-service platforms that make it easy for you and your employees to manage HR activities. Some PEOs offer customized reporting which can improve your decision-making capabilities.


With a PEO, employers have experienced HR professionals delivering a wide range of personnel management solutions and best practices.

Plus, you have access to seasoned experts in tax, labor law, benefits, and workers’ compensation who can help improve your company’s productivity and profitability.

Employees also have a go-to resource, that’s available whenever needed.


A PEO establishes a special relationship with employers and worksite employees. The role of the PEO is to assume certain employer rights, responsibilities, and risk. Some responsibilities are shared, like regulatory compliance, and hiring and termination processing. Employers retain control of their business operations and employee hiring, firing, and advancement.

The chart below provides more details on the critical value a PEO delivers. With all these administrative responsibilities cared for, it’s easy to see how business owners have more time and energy to focus on their primary interest—the missions of their businesses.


As the employment environment becomes increasingly complex and competitive, employers across the nation are taking advantage of the expertise and solutions offered by PEOs. To learn more, contact us today to speak to a PEO expert.

This study was done with the help of Extensis PEO.


89 views0 comments

Recent Posts

See All


bottom of page