What is a PEO?

A PEO is short for Professional Employer Organization. You can bring clients under the umbrella of a PEO to act as co-employers of your clients’ own staff. PEOs share their tax IDs with your clients. Since the PEO has a bigger pool of employees (counting all the other employer groups under its umbrella), your clients gain flexibility and several advantages.

An SBA study estimated that the average small business owner spends between 7% and 25% of his or her time handling employee-related paperwork. When you add in the time spent on all the other HR tasks, this figure rises to 35% to 45%. By outsourcing some or all of their employee-related functions, small business owners can focus on the business. And in the process, they can improve productivity and save money.

More partnership advantages:

• access to the PEO’s MOD – if the onwer's MOD is bad and premium rates are too high
• payroll administration, tax filing and government compliance are handled by the PEO
• outsourced employee administration and human resources
• consolidated HR, risk management and unemployment claim administration
• guidance through workers’ compensation claim management
• elimination of workers’ comp audits

But some companies mistakenly think that PEOs are only for large businesses and only for payroll services. Assure them that that’s not so.

Any size business receives an equal or better benefit from PEOs once they join - payroll services are just the beginning!

Business owners may also fear loss of control. The opposite is true. By sharing responsibilities, owners have time to concentrate on what’s important – growth! Managers can still hire and fire employees – and professional guidance is available through stressful situations like firings and layoffs.