Professional Employer Organization Overview

A professional employer organization (PEO) is a provider services which gives business owners a cost-effective way to outsource the management of human resources, employee benefits, payroll and workers’ compensation and other services, including recruitment, risk/safety management, and training and development. It take responsibility for the hiring of it's clients employees. In doing so they becoming their employer of record, which can be beneficial for tax and insurance purposes. The relationship between PEO service providers and companies is also refereed to as co-employment.

PEO Services

PEO are very useful for Workers Compensation insurance coverage for client companies at lower cost than they can get on there own.

Also, PEO companies can keep an updated record of employee information. This can often improve practices of employment from compliance to risk management reducing liabilities. It also frees employees need to maintain management systems which can be time consuming and costly. With there knowledge of the labor market they can also provide incite and strategy’s for there clients. In this they can maximize the competency in the labor market. Many of the PEO services can also provide there clients with background & drug screening services.

The Benefits of PEO Services

Obtaining a PEO can save time and the need for staff that would be delegated to preparing payroll and benefits plans. The can also potentially reduce legal liabilities or obligations to employees . PEO services can also afford companies the opportunity to offer better overall benefits, in turn recruiting better qualified employees. PEO services can be most beneficial to small and mid-sized businesses.

Who Uses PEO Services

In the United States, many small to medium size professional services firms utilize PEO services to allow them to provide the kinds of benefit plans which otherwise could only be made available at a prohibitively high cost to both the employer and the employee.

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