Do PEOs Provide Employee Benefits?

A company's employees may gain access to benefits typically available only to large companies when they work with a PEO. This can include health insurance, disability insurance, employee assistance and discount programs, 401(k) plan administration , and other benefits. Beyond these, PEOs may provide online access to employees’ reports, pay stubs, and W-2 forms to enable employee self-service, often leading to better engagement in the programs and the company culture. Companies that work with a PEO usually experience lower group insurance costs since PEOs can negotiate rates with insurance companies with a larger employee count. PEOs may offer a lower state unemployment insurance (SUI) rate in certain states.

Who Is the Employer and Who Is Responsible for Employees?

Organizations that enter a PEO relationship maintain control of their business. The PEO assists with many employment-related aspects of a company, such as payroll, HR administration, employment-related taxes, and employee benefits. This support helps the organization to find more time to oversee its day-to-day business operations, encompassing employee hiring, performance management, leadership development, and accounting.

How Many Businesses Use a PEO?

PEOs in the United States provide services to 200,000 small and mid-sized businesses, employing 4.5 million people. 2

Is the Use of PEOs Growing?

Seventy-eight percent of business leaders report it's extremely or highly likely that they will outsource HR administration in the year ahead. 1 The top priority for outsourcing to a PEO was to help with HR management for employee relations, strategy, policies, and procedures. Where does outsourcing to a PEO deliver the most value? Leaders rank these areas as most helpful to outsource: 1 HR management support Recruiting and onboarding Payroll processing 401(k) administration Benefits administration Assistance with managing employee performance Risk management/ workers’ compensation Assistance with maintaining regulatory compliance

How Can a PEO Help Control HR Costs?

A PEO's economies of scale and buying power can help to lower certain employment costs and increase the bottom line. You may be able to maintain a simple in-house HR infrastructure or none at all by relying on the PEO, thereby reducing hiring overhead. A PEO can assist with employer compliance and time savings by handling routine and redundant activities. Businesses that work with a PEO can save an average of $1,775 per employee per year. 3

How Much Does a PEO Cost?

The cost of a PEO is determined by several factors, including the size of the business, which HR services will be outsourced , and the number and type of employees on the payroll. PEOs typically charge either a flat fee per employee or a percentage of the total payroll. Suppose you have the choice of using either pricing model. In that case, you may wish to calculate the yearly expenses using both pricing models to evaluate expected PEO costs and determine which option makes the most financial sense for your business.

How Do PEOs Make Money?

PEOs generally generate revenue through fees associated with their service agreement with their clients. The charges typically vary based on the total number of employees in the organization and the extent of services requested.

Are PEOs Accredited and Audited?

When researching PEOs, knowing how or if they are accredited and independently audited should be an essential part of your selection process. For example, Paychex HR PEO has a SOC 1 Type II certification focusing on outsourced services performed by service organizations relevant to a company's financial reporting. Paychex is accredited by the Employer Services Assurance Corporation (ESAC). ESAC is the nationally recognized financial assurance, standard-setting, and monitoring entity for the Professional Employer Organization (PEO) industry. Through its voluntary accreditation process, ESAC ensures that participating PEOs adhere to ethical, financial, and operational standards to promote high integrity and responsibility within the PEO industry. As a condition of continued accreditation, we must submit quarterly reports to ESAC, including financial statements and an independent Certified Public Accountant's verification of the timely and accurate payment of all payroll taxes, employee benefits contributions, and insurance premiums.

What Is a Staffing Agency?

Staffing agencies generally find and place employees at a client organization for a fee. While A PEO may help with aspects of the hiring process (such as posting open positions on job boards, helping to write position descriptions, and applicant tracking), they are not responsible for hiring and placing employees for a client organization. Instead, a PEO will generally provide payroll, benefits, HR administration, and compliance monitoring services.

What Is Employee Leasing?

"Employee leasing" generally refers to a business arrangement in which a staffing agency supplies its employees to another business, typically for a specified period or project duration.

What Are Some Potential Advantages of Working With a PEO?

PEO specialists bring a breadth of cross-industry expertise. They meet diverse challenges and use a comprehensive toolbox for effective problem-solving. This versatility can result in helpful employee- or HR-related resolutions. Look for a PEO that prioritizes continuous training, helping to ensure specialists stay abreast of the latest employee relations and HR developments. This commitment places PEOs at the forefront, providing clients with up-to-date solutions and strategies. Moreover, PEOs often provide digital technology platforms for employees to access essential documents, including pay stubs, W2s, and PTO balances. Additionally, PEOs can improve a company's benefits package, introducing valuable features like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), commuter benefits, and employee assistance programs (EAP), helping to enrich the overall employee experience.

What Are the Tax Implications of Working With a PEO?

Several PEOs handle payroll taxes on behalf of a client by using the PEO's tax ID for federal purposes and in states when it's allowed. Upon exiting the PEO arrangement, the shift occurs to pay taxes under the client's tax ID s, and certain wage base contribution caps will start over. This underscores the importance of strategically timing the exit from a PEO, making January 1st an ideal choice to ensure a smooth transition and compliance with tax obligations.

Does Working With a PEO Affect Company Culture?

Working with a PEO won't inherently affect your organization's culture unless that aligns with your specific goals. Some PEOs may offer guidance and recommend strategies to shape your company's culture and brand, where this is part of your objectives. This can support your goal of employees perceiving your business in a manner that reflects your desired image both presently and in the future.

Business Process Outsourcing (BPO) involves delegating internal company practices to a third party, covering payroll, IT management, website and social media management, benefits administration, and customer service. BPO companies assist businesses in saving costs by offering outsourced services as needed. For instance, small businesses may benefit from outsourcing IT management without the expense of hiring a full-time IT manager. PEOs, unlike temp or staffing agencies, do not control hiring and firing decisions for their clients. PEOs offer a comprehensive range of employee and HR-related services, including payroll processing, tax handling, onboarding, benefits, and insurance. While BPOs charge for specific services, PEOs often offer a more comprehensive bundled arrangement, offering multiple HR solutions for a combined fee.

What Is a PEO? Definition & How It Works in HR

PEO
Article
9 min. Read
Last Updated: 02/27/2025

Reviewed By:

Barbara Corbo

PEO Benefits Director

Paychex

Tami Tillery

PEO Benefits Product & Program Sr. Manager

Paychex

A business owner works with a PEO to outsource HR administrative tasks

Table of Contents

What Is a PEO and What Does It Stand For?
How Does a PEO Work?
Busting Myths About PEOs
Why Do Companies Use a PEO?
What Types of Companies Use and Benefit From PEOs?
Differences Between PEO and Other Services
Future Trends in PEO Services
How To Choose a PEO
Free Up Time and Resources With a PEO
FAQs About PEOs

What is a PEO? Use this guide to learn more about what a PEO is, how PEOs work, why companies may use them, and the different types of PEOs.

As a business owner, you may think that comprehensive HR solutions and impressive benefits packages seem beyond your grasp, mainly when other business areas require your time and attention. That's why it may be helpful to understand what a professional employer organization (PEO) can offer your business and the potential benefits you might be able to expect when outsourcing HR administrative tasks.

What Is a PEO and What Does It Stand For?

A PEO or “professional employer organization” supports their clients’ HR, payroll, benefits, risk management, and compliance. Under certain circumstances you may also hear this referred to as co-employment. In a co-employment relationship, employer and PEO responsibilities will be defined in a service agreement.

Business leaders looking for HR help can outsource specific HR administrative tasks like payroll, benefits, workers' compensation, and employee training when working with a PEO to help save time and money. You can also gain guidance to help maintain your compliance with federal and state employment laws and other specialized support for time-consuming tasks such as 401(k) plan administration and health, dental, and life insurance so you and your management team can stay focused on the business and your customers.

A chart showing what services are included in a PEO

Are There Different Types of PEOs?

PEOs do not supply labor to worksites or other staffing services, nor do they take over the hiring and management of your employees. PEOs are defined by their service agreements, so there can be some differences between PEOs depending on the extent to which they provide HR and employee relations support services for a business's existing workforce. In short, PEOs offer outsourced HR services.

Read more about the HR services offered by PEOs.

How Does a PEO Work?

In this type of arrangement, a client company signs a service agreement with the PEO, which generally includes the following:

The PEO performs certain HR administrative services while the client remains the worksite employer. The PEO can help support a client's in-house HR staff and teams.
The client company is responsible for hiring and managing their employees and handling non-employee-related business operations (e.g., sales, marketing, customer service).
For the duration of the service agreement, the PEO is responsible for processing employee wages, benefits, and withholdings and for remitting and reporting taxes to any applicable state and federal authorities.
The PEO helps the client company maintain compliance by keeping track of complex employment laws and offering risk management strategies. This may include payroll tax laws and reporting requirements, workers' compensation, and employee relations issues.
An HR professional works with the client company to help the organization address, easing concerns about employee relations and accommodations, terminations, and other employee-workplace issues.
Specific tasks, such as developing an employee handbook, may be shared between the client company and the PEO as outlined in the service agreement.
PEOs can assist with many HR functions, allowing businesses and internal HR teams to focus on company culture, client satisfaction, and employee engagement.
The client company has access to the PEO's Fortune 500-level benefits options and support for administering them.

What Doesn't a PEO Do?

In contrast to leasing or staffing companies, which typically supply new workers on a temporary or project-specific basis, a PEO takes a different approach. A PEO doesn't engage in recruiting or hiring employees for their clients.

PEO Services provide various options to help meet your business needs.

Busting Myths About PEOs

There are several misconceptions about professional employer organizations (PEOs) that can create confusion for business leaders considering this model. However, the truth is that PEOs offer significant advantages while allowing businesses to maintain control over critical HR decisions. Let’s explore and debunk some common myths about PEOs:

Myth	Fact
Working with a PEO means losing control of your business.	PEOs provide advanced HR tools, compliance support, and employee self-service features while allowing you to retain control over key business and personnel decisions.
PEOs take over hiring and firing decisions.	You remain in charge of hiring, promotions, and terminations. PEOs handle administrative tasks, allowing you to focus on these essential decisions.
PEOs don't save you money.	PEOs can save businesses money by streamlining HR processes and offering competitive benefits, reducing costs and compliance risks.
PEO certifications don't matter.	Accredited PEOs, like Paychex HR PEO, meet high standards of ethical, operational, and financial reliability through organizations such as ESAC.
PEOs limit benefit options.	PEOs can offer more comprehensive and competitive benefits through collective buying power, including medical, dental, vision, life insurance, retirement plans, disability benefits, voluntary benefits, employee assistance programs (EAP), and other perks.
PEOs will replace your HR team.	PEOs can enhance your HR team's efficiency by taking over administrative burdens, allowing your HR staff to focus on employee engagement and development.
All PEOs are the same.	Not all PEOs are alike. Paychex HR PEO offers customized solutions, specialized support teams, and transparent billing, tailored to meet your specific business needs.

Why Do Companies Use a PEO?

While it may be challenging to trust certain aspects of your business operations to an external organization, business owners across the country are realizing the benefits of a PEO. So why use a PEO? For time- and energy-strapped employers, working with a PEO can free up a considerable amount of company resources that would otherwise be spent on administering payroll and other required, time-consuming tasks.

Paychex client and HR business partner Jillienne Allgäuer, SPHR, SHRM-SCP, outlines some of the most critical PEO benefits for business owners: "A PEO can offer support with administrative services spanning the entire employment life cycle. From assisting with recruiting and hiring, employee handbook development, cultivating an attractive benefits package, and ongoing management training, to consulting on employee coaching and dismissal processes and handling unemployment claims, a PEO can provide businesses both substantial administrative relief and valuable resources."

Businesses can expect many valuable PEO advantages, including:

Time savings: Clients may find that having the PEO absorb most of the time commitment associated with general HR tasks allows them to focus on other core business operations.
Cost savings: A PEO's buying power regarding workers' compensation and health insurance is generally greater, which helps to make these purchases more affordable than what's available to small businesses.
Peace of mind: Business owners may feel at ease knowing they are not alone at any point throughout the employment life cycle.
Better benefit offerings for employees: Companies looking to offer competitive benefits packages gain access to Fortune 500-level benefits and professional administrative services. Additionally, some PEOs may provide comprehensive benefits packages that encompass all areas of employee wellness: physical, mental, and financial wellness among them.
Improved tracking and administrative functions: The PEO typically conducts an in-depth HR assessment to help minimize risk and maximize growth and development opportunities.
Business growth: According to the National Association of Professional Employer Organizations (NAPEO), "Businesses in a PEO arrangement grow 7-9 percent faster, have 10-14 percent lower turnover, and are 50 percent less likely to go out of business."
Help with recruiting and retention: Recruiting, engaging, and retaining staff can be time-consuming and expensive. A PEO can help you maximize the investment in your people by assisting in the recruiting and hiring process, helping communicate policies via an employee handbook, providing training programs, and offering guidance throughout the employee life cycle.
Employment-related compliance help: Having support and guidance from a PEO can assist business owners with their compliance efforts as they navigate increasingly complex regulations and demanding business processes.
Employee morale and satisfaction: PEOs provide access to competitive benefits, boosting job satisfaction and fostering a positive work environment, leading to higher morale and productivity.
Improved onboarding and training: PEOs streamline onboarding through efficient processes and provide ongoing training, setting employees up for success and boosting retention.
Access to advanced technology: PEOs utilize advanced HR platforms that automate tasks like payroll and benefits management, improving efficiency and offering employees self-service options.

What Types of Companies Use and Benefit From PEOs?

Any business can find value in a PEO relationship. The PEO industry’s 208,000 clients represent 17 percent of all employers with 10 to 99 employees.¹ ²

Increasingly larger businesses are also finding benefits with a PEO arrangement because PEOs offer robust web-based HR technologies and expertise in HR management. PEOs can work in conjunction with their clients’ existing HR departments.

PEO clients include various types of businesses from various industries, including professional services firms, skilled trades companies, and high-tech organizations.

Differences Between PEO and Other Services

A PEO is one type of HR outsourcing. Other options are available, which can also help you manage your business more effectively. When evaluating your options or familiarizing yourself with PEO terminology, knowing the differences between a PEO vs. HR software and PEO vs. payroll companies is essential.

PEO vs. HR Software

A PEO differs significantly from solely leveraging HR technology. A PEO allows your company to outsource HR functions such as payroll, benefits, employee training, and access guidance to help your company comply with federal and state employment laws. Software only provides a platform for you to manage these activities independently.

PEO vs. Payroll Company

When it comes to payroll, PEOs and payroll services companies both aim to streamline the process, but there are significant differences in how the process is executed. Depending on your provider, outsourcing to a payroll company means you receive assistance running payroll and help calculating, preparing, and remitting payroll taxes and returns to government agencies. However, the business is ultimately responsible for meeting its payroll and tax obligations, even using a third party.

A PEO offers a more comprehensive solution. The PEO generally assumes responsibility for processing employee wages under the terms of the service agreement, as well as benefits, withholdings, and remitting and reporting taxes to any applicable state and federal authorities on behalf of the client company. Additionally, PEOs go beyond payroll and offer support in other areas such as regulatory compliance, workplace safety, workers' compensation, and HR administration.

PEOs vs. Traditional HR Models

Criteria	PEO (Professional Employer Organization)	Traditional HR Model
Cost	PEOs charge a service fee but often reduce costs regarding group rates for benefits, SUTA, workers’ compensation coverage, and streamlined HR processes	Requires higher costs for HR staff, recruitment and software
Resource Allocation	PEOs help support payroll benefits and related compliance, freeing up internal resources	Internal teams manage all HR tasks, demanding more time and expertise
Compliance Management	PEOs help ensure compliance with employment laws, reducing regulatory risk	Businesses must stay up to date with regulations increasing compliance risk and workload
Employee Benefits	PEOs offer competitive benefits through pooled buying power, ideal for smaller businesses	Benefits are managed directly by the business often resulting in less favorable terms for small companies
Payroll Management	PEOs reduce administrative tasks, such as payroll processing, tax withholdings and filings	Businesses manage payroll and tax compliance internally or through software requiring more oversight
Business Control	PEOs engage in a co-employment relationship with the client company	Businesses maintain full control over HR functions allowing for complete customization
Scalability	PEOs are ideal for small to mid-sized businesses looking to scale without building an HR department	Businesses must expand HR teams and systems as they grow increasing costs and resources needed
HR Expertise	PEOs provide expert guidance across HR areas like employee relations and safety	Internal teams rely on in-house expertise which can be costly to maintain
Strategic Focus	PEOs support HR admin tasks allowing leaders to focus more on business growth	Leadership is more involved in day-to-day HR which can divert focus from strategic initiatives
Best Suited For	Best for small to mid-sized businesses looking for support with HR admin and offer competitive benefits	Best for larger businesses needing direct control and customization of HR functions

When choosing between a professional employer organization (PEO) and a traditional HR model, businesses must weigh factors like cost, resource allocation, and strategic needs. Both approaches offer distinct benefits depending on the company's size, industry, and goals. Below is a comparison of key differences to help figure out which option is best for your business.

Article

Read More

How To Choose a PEO: Top 12 Questions To Ask & Features To Consider Before You Decide

Cost: PEOs offer cost savings through pooled benefits and reduced administrative burden, while traditional HR models require ongoing investment in HR staff and software.
Resource Allocation: PEOs help handle day-to-day HR admin tasks like payroll, allowing businesses to focus on growth. Traditional HR models require businesses to manage these tasks internally.
Compliance: PEOs help address changes in employment laws and business impacts. Traditional HR models require businesses to stay current on regulations, increasing administrative workload.
Employee Benefits: PEOs can offer competitive benefits packages through group rates, which may be more challenging for smaller businesses to offer independently.
Control: Traditional HR models offer more direct control over HR policies and processes.
Scalability: PEOs are ideal for small and mid-sized businesses looking to scale quickly without building an HR department. Traditional HR models are better suited for larger companies with established HR teams.

Future Trends in PEO Services

As the business landscape evolves, PEOs are adapting to meet new challenges, leveraging technology, and addressing the needs of an increasingly global and remote workforce. Below are some key trends expected to shape the future of PEO services:

AI-Supported HR Analytics: PEOs will likely use AI to support real-time insights into employee performance, turnover, and engagement, helping businesses make data-driven decisions about hiring and retention.
Personalized Employee Engagement Programs: Future PEOs may offer tailored wellness, benefits, and development programs based on individual employee needs, improving satisfaction and loyalty.
Expanded Remote Workforce Support: PEOs will assist businesses in managing compliance and HR needs for global remote teams, ensuring adherence to local laws and providing consistent benefits worldwide.
Advanced Compliance Management Tools: Automated compliance systems will help businesses stay updated with changing regulations, reducing legal risks and administrative burdens.
AI-Powered Learning and Development: PEOs may introduce AI-driven training programs that personalize employee learning paths, enhancing skill development and career growth.
Integration with Emerging Technologies: PEOs could integrate blockchain for secure data, virtual reality for training, and predictive analytics to better anticipate HR needs and improve efficiency.
Focus on Employee Wellness and Mental Health: Expect to see more comprehensive wellness programs, including mental health support and personalized wellness plans, to foster a healthier, more engaged workforce.

How To Choose a PEO

Although PEOs offer multiple cost- and time-saving strategies, working with a PEO may not suit every business. Even after determining that a PEO can benefit your company, selecting the PEO that offers the right combination of add-on services, a range of benefits, flexibility, stability, and reputation remains essential for any employer. Learn more about choosing a PEO.

Free Up Time and Resources With a PEO

Choosing the appropriate professional employer organization can take your company to the next level — resulting in increased retention, better benefits, and significant cost savings for your business.

Take advantage of all the benefits of working with a PEO with Paychex PEO, which provides various options to help you meet your business needs. This investment can reap significant rewards for your small business moving forward and free you to focus on continued business growth.

FAQs About PEOs

Do PEOs Provide Employee Benefits?
Do PEOs Provide Employee Benefits?

A company's employees may gain access to benefits typically available only to large companies when they work with a PEO. This can include health insurance, disability insurance, employee assistance and discount programs, 401(k) plan administration, and other benefits. Beyond these, PEOs may provide online access to employees’ reports, pay stubs, and W-2 forms to enable employee self-service, often leading to better engagement in the programs and the company culture.
Companies that work with a PEO usually experience lower group insurance costs since PEOs can negotiate rates with insurance companies with a larger employee count. PEOs may offer a lower state unemployment insurance (SUI) rate in certain states.
Who Is the Employer and Who Is Responsible for Employees?
Who Is the Employer and Who Is Responsible for Employees?

Organizations that enter a PEO relationship maintain control of their business. The PEO assists with many employment-related aspects of a company, such as payroll, HR administration, employment-related taxes, and employee benefits. This support helps the organization to find more time to oversee its day-to-day business operations, encompassing employee hiring, performance management, leadership development, and accounting.
How Many Businesses Use a PEO?
How Many Businesses Use a PEO?
Is the Use of PEOs Growing?
Is the Use of PEOs Growing?
Seventy-eight percent of business leaders report it's extremely or highly likely that they will outsource HR administration in the year ahead.¹ The top priority for outsourcing to a PEO was to help with HR management for employee relations, strategy, policies, and procedures.
Where does outsourcing to a PEO deliver the most value? Leaders rank these areas as most helpful to outsource:¹
1. HR management support
2. Recruiting and onboarding
3. Payroll processing
4. 401(k) administration
5. Benefits administration
6. Assistance with managing employee performance
7. Risk management/workers’ compensation
8. Assistance with maintaining regulatory compliance
How Can a PEO Help Control HR Costs?
How Can a PEO Help Control HR Costs?

A PEO's economies of scale and buying power can help to lower certain employment costs and increase the bottom line. You may be able to maintain a simple in-house HR infrastructure or none at all by relying on the PEO, thereby reducing hiring overhead. A PEO can assist with employer compliance and time savings by handling routine and redundant activities. Businesses that work with a PEO can save an average of $1,775 per employee per year.³
How Much Does a PEO Cost?
How Much Does a PEO Cost?

The cost of a PEO is determined by several factors, including the size of the business, which HR services will be outsourced, and the number and type of employees on the payroll. PEOs typically charge either a flat fee per employee or a percentage of the total payroll.
Suppose you have the choice of using either pricing model. In that case, you may wish to calculate the yearly expenses using both pricing models to evaluate expected PEO costs and determine which option makes the most financial sense for your business.
How Do PEOs Make Money?
How Do PEOs Make Money?
Are PEOs Accredited and Audited?
Are PEOs Accredited and Audited?

When researching PEOs, knowing how or if they are accredited and independently audited should be an essential part of your selection process. For example, Paychex HR PEO has a SOC 1 Type II certification focusing on outsourced services performed by service organizations relevant to a company's financial reporting. Paychex is accredited by the Employer Services Assurance Corporation (ESAC). ESAC is the nationally recognized financial assurance, standard-setting, and monitoring entity for the Professional Employer Organization (PEO) industry. Through its voluntary accreditation process, ESAC ensures that participating PEOs adhere to ethical, financial, and operational standards to promote high integrity and responsibility within the PEO industry. As a condition of continued accreditation, we must submit quarterly reports to ESAC, including financial statements and an independent Certified Public Accountant's verification of the timely and accurate payment of all payroll taxes, employee benefits contributions, and insurance premiums.
What Is a Staffing Agency?
What Is a Staffing Agency?

Staffing agencies generally find and place employees at a client organization for a fee. While A PEO may help with aspects of the hiring process (such as posting open positions on job boards, helping to write position descriptions, and applicant tracking), they are not responsible for hiring and placing employees for a client organization. Instead, a PEO will generally provide payroll, benefits, HR administration, and compliance monitoring services.
What Is Employee Leasing?
What Is Employee Leasing?
What Are Some Potential Advantages of Working With a PEO?
What Are Some Potential Advantages of Working With a PEO?

PEO specialists bring a breadth of cross-industry expertise. They meet diverse challenges and use a comprehensive toolbox for effective problem-solving. This versatility can result in helpful employee- or HR-related resolutions.
Look for a PEO that prioritizes continuous training, helping to ensure specialists stay abreast of the latest employee relations and HR developments. This commitment places PEOs at the forefront, providing clients with up-to-date solutions and strategies.
Moreover, PEOs often provide digital technology platforms for employees to access essential documents, including pay stubs, W2s, and PTO balances. Additionally, PEOs can improve a company's benefits package, introducing valuable features like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), commuter benefits, and employee assistance programs (EAP), helping to enrich the overall employee experience.
What Are the Tax Implications of Working With a PEO?
What Are the Tax Implications of Working With a PEO?

Several PEOs handle payroll taxes on behalf of a client by using the PEO's tax ID for federal purposes and in states when it's allowed. Upon exiting the PEO arrangement, the shift occurs to pay taxes under the client's tax IDs, and certain wage base contribution caps will start over. This underscores the importance of strategically timing the exit from a PEO, making January 1st an ideal choice to ensure a smooth transition and compliance with tax obligations.
Does Working With a PEO Affect Company Culture?
Does Working With a PEO Affect Company Culture?

Working with a PEO won't inherently affect your organization's culture unless that aligns with your specific goals. Some PEOs may offer guidance and recommend strategies to shape your company's culture and brand, where this is part of your objectives. This can support your goal of employees perceiving your business in a manner that reflects your desired image both presently and in the future.
What Is a BPO?
What Is a BPO?

Business Process Outsourcing (BPO) involves delegating internal company practices to a third party, covering payroll, IT management, website and social media management, benefits administration, and customer service. BPO companies assist businesses in saving costs by offering outsourced services as needed. For instance, small businesses may benefit from outsourcing IT management without the expense of hiring a full-time IT manager.
PEOs, unlike temp or staffing agencies, do not control hiring and firing decisions for their clients. PEOs offer a comprehensive range of employee and HR-related services, including payroll processing, tax handling, onboarding, benefits, and insurance.
While BPOs charge for specific services, PEOs often offer a more comprehensive bundled arrangement, offering multiple HR solutions for a combined fee.

¹ 2024 Priorities for Business Leaders, Paychex

² Industry Statistics - NAPEO

³The ROI of Using a PEO - NAPEO

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What Is a PEO? A Guide to Understanding Professional Employer Organizations