What is a PEO? I am going to answer this question for you and also give you a basic understanding of the services they typically provide, why they exist, and explain how they might give you and your business an advantage over your competition.
“PEO” stands for professional employer organization. A professional employer organization (PEO) is a partner for your business that makes having employees easier through a unique HR outsourcing relationship. Learn more about the unique HR outsourcing partnership the PEO model uses called “Co-employment” .
Full disclosure – we are a PEO. Employers Resource (we write this blog you’re reading) is a national PEO, licensed in all 50 states, and we’ve been blazing trails in this industry since 1985. We know a thing or two about this term and its history. We’ve seen the many iterations: administrative employer, co-employer, employee leasing etc. They all stem from the same model that we will discuss in this article. You can also go ahead and take the whole “burrito to-go” right now by grabbing the ebook that covers this same topic.
I think calling a PEO a “professional employer” is perfect because that’s exactly what we are. We are professionals at being an employer.
Ask yourself, what are you a professional at? Is it everything that has to do with employment? If not, continue reading to discover if a PEO can help you keep it that way. That’s our goal. We want to be the professional employer for your business, so you can be the professional you need to be.
It’s About People and Time
All successful businesses are dependent on one common resource. People. You, your management team, and your employees are what will power your company to survive and thrive.
Managing your people well, and in compliance with all those regulatory laws, takes somebody’s time. Will it be yours?
A PEO exists to make sure that you and your employees are able to spend your time doing what you love to do and do best. Sometimes details like administrative HR tasks and regulatory compliance get in the way of this.
What if you could remove the details that distract you from your calling?
Sounds nice, but you are probably wondering how we’d do that, right?
You will see PEO services described in many different ways using way too many buzzwords, lingo, and tradespeak. We like to keep things simple around here, so we use the ABCs and 123s (and 4s) to describe what we do.
We provide relief from:
- A – Administrative burdens
- B – Business costs
- C – Compliance risk
In the following 4 areas:
We’ve also created a quick tour where you can explore these four main areas in more detail.
What a PEO is NOT
“PEO” is often mistaken as a synonym for “payroll provider.” Payroll providers and PEOs are fundamentally different. Pay attention to the “line of liability” in the diagram below. We are one vendor that deals with all these complex areas and shares in the liability related to the work done for your business in these areas. Unlike a payroll provider, who would only be one vendor out of the many you would need to replace a PEO.
Our industry, like many others, has been muddied with misunderstandings over the years. Here’s a couple more clarifications I’d like to make:
- You don’t lose control of your employees. You still determine your business objectives, dictate your agenda, and direct your employees’ daily activities.
- PEO companies are not staffing companies.
- PEO companies can be a great option for businesses of many different types and sizes.
Who Can a PEO Help?
The short answer – any business leader who wants to make their life with employees easier. PEO companies can be a great option for companies with any number of employees (even if you have in-house HR team) and in many different industries. You can get a free custom quote right now if you’re curious.
PEO companies are great for:
- Busy business owners
- Doing more of what you love to do
- Managing employee paperwork
- Midsize companies
- HR professionals
- Simplifying payroll and taxes
- Controlling risk
- Selling your company
- Navigating healthcare reform
- Winning and keeping talent with better employee benefits
- Normalizing cash flow
What it Means to You – the PEO Advantage
It’s simple. With a PEO, you and your people have more freedom and time to do what you love to do and are best at. This re-allocation of valuable time, money, focus, and energy will give you a distinct advantage over your competition. You’ll get more done. Your business will grow. Your service will be improved. You will innovate. You’ll lead. Your life will be easier and more simple.
Think of the type of business leader/owner you want to be. What does that look like? For many, it looks like more freedom, more control, and more simple.
Let your spirit of entrepreneurship run free, even after the employees come. That’s what we are all about at Employers Resource.
Long live the spirit of entrepreneurship. Stay free.