What is a PEO?

What is a PEO and what does PEO Stand for?

Before you answer the question of, “What is a PEO?“,  you need to know what PEO stands for. Actually, PEO is an acronym for Professional Employment Organization – and what does that mean? A PEO is a company that offers co-employment services to companies like yours.

A PEO handles the human resources administrative aspects of managing employees and frees up human resource professionals to handle the management and the day-to-day of the staff. The PEO specializes in payroll, workers compensation, health benefits and human resources.

They have significant purchasing power with insurance carriers because of the number of members they hold though their customers.

What is a PEO

What is a Co Employment Relationship?

Structure of a PEO

The National Association of Professional Employer Organizations (NAPEO) defines co-employment as the contractual allocation and sharing of employer responsibilities between a PEO and its client.

In a co-employment agreement, workers are technically employed by two separate entities: the business owner, or client employer, who controls their daily duties and core job functions; and the PEO, or co-employer, who handles personnel-related functions.

Co-employers do not supply a workforce; they supply services and benefits to a client employer and its existing workforce. The client employer maintains control of all business decisions and operations while the co-employer manages employee-related aspects of business operation.

How can a PEO help my company?

Save Time, Money and Effort

Since they have better purchasing power, PEOs are better able to offer their clients richer benefits for significantly lower costs.

They are able to help you maximize your profits, increase the productivity of your employees, reduce time spent on transactional human resources, reduce employer’s liability, and ultimately reduce overall labor costs.

To get an idea of exactly how much time and resources you can save, try our free quoting tool and get your free analysis.

Think of us as another person in your organization who will do a full analysis for your company’s needs vs. costs by comparing which PEO best fits your business’ needs. EasyPEO does not charge a fee for this service.

How does EasyPEO help me?

Once we gather your information we analyze it to determine which PEOs are currently the best fit for your firm. EasyPEO then does a side-by-side cost comparison against what you currently have in place today.

We review it with you and give you our best recommendations based on your firm’s current needs. EasyPEO saves you time in meetings — and with EasyPEO you only have to complete one application – dramatically reducing paperwork.

We are your advocate throughout the entire process and through implementation – now and in the future. You can always call us if you are experiencing any issues which are not being resolved in a timely manner. We are here with you for the long haul. We will do an annual reassessment of your needs to maintain an optimal experience in the PEO space.

PEO Analysis

What are the Advantages of using a PEO?

The most noticeable benefits of using a PEO are:

  • You will receive superior benefits for lower costs
  • Your firm may have more than one health benefit plan in place
  • Additionally, streamlining your internal back office with one company and a group of dedicated professionals managing your payroll, workers compensation, employee benefits, and human resources saves you valuable time and money.

There are some benefits that may not be as obvious but deserve mention:

  • A PEO can help with your workers compensation program. No more insurance audits and your company pays as you use the service
  • Your firm is not locked into an arrangement with the PEO
  • Costs are proportional to your size so you can control costs in the event you grow or downsize the company
  • The PEO can assist you with safety procedures
  • You’ll have an expert to help you handle HR challenges and many governmental agency compliance issues such as: the Department of Labor, Occupational Safety and Health Administration (OSHA), and the Affordable Care Act (ACA)

What are the Disadvantages of using a PEO?

PEOs are a service that has a cost associated with it. A company takes on administrative cost per employee. This is an additional cost. So, the fees vary and scale with the size of the firm.

For a PEO to do their job properly, they require a certain level of autonomy. Hands on business owners may have to make adjustments to this. This is the case with any outsourcing scenario. Therefore, PEO staff is the responsibility of the PEO so they are not in-house employees.