Why a Professional Employer Organization (PEO) is worth exploring for all business owners.

3 Minutes Read

Whether you're a business owner, high-level executive, or investor you know that every cent counts. As you scale operations, your Human Resources (HR) team needs will pile up. What if, instead of adding a new staff member or department to the payroll, you could outsource these functions to a specialized expert? It’s called partnering with a professional employer organization (PEO).

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What is a PEO?

A professional employer organization - or PEO - allows business owners to outsource key HR duties to help ensure they remain in line with federal and state employment laws, including:

  • Payroll
  • Benefits
  • Training
  • Compliance

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Benefits of Using a PEO

When businesses partner with a PEO they reap various benefits, including time savings, cost savings, competitive edge, improved tracking and administrative functions, access to strong  benefits packages, streamlined employee onboarding, and guidance with government compliance.


Time Savings

Business leaders can focus on daily operations and high-value tasks instead of worrying about HR functions.

Cost Savings

One of the main reasons companies turn to PEOs is the significant cost savings that outsourcing provides. Direct savings stem from reducing HR department headcount, software, and systems expenditures.

Competitive Edge

It takes a talented team to keep a leg up on the competition, but sourcing and hiring talented team members can be extremely costly. PEOs typically employ experienced recruitment experts who are well-versed in the hiring needs of growing companies. PEO clients have an 11%-20% lower turnover rate than their counterparts that don’t use a PEO.

Improved Tracking and Administrative Functions

PEOs conduct in-depth HR assessments to help minimize risk and to maximize growth and development.

Access to Strong Benefits Packages

PEOs help businesses provide their employees with competitive benefits encompassing medical, dental, vision, 401(k) retirement plans, and more. Comprehensive benefits packages are essential to attract and retain top talent.

Streamlined Employee Onboarding

PEOs use comprehensive, integrated HR technology to ensure easy access to compliant, new-hire paperwork while keeping track of employee data.

Guidance with Government Compliance

No business wants to be fined or penalized for not complying with employment laws. PEOs can provide valuable and insightful advice on employment-related federal, state, and local government regulations and can help companies develop solutions for tedious situations that may arise between employees. Lean on your PEO's expert and impartial advice to help you discover the best path to protect your business and employees.

Image of two succesful business people conducting an interview to hire their next employee

Common PEO Myths

Myth #1: Business owners who partner with PEOs don't have control over their business. 

Truth: Owners and managers don't lose any control when they partner with a PEO. Instead, they gain a strategic partner who takes charge of HR responsibilities to ensure improved efficiency, practices, and strategies.


Myth #2: A PEO has the authority to hire and fire client employees. 

Truth: Although PEOs do help businesses find job candidates, the decision to interview and/or hire candidates is entirely up to the owner and the company. In PEO partnerships, talent management duties remain with the owner. They just need to notify the PEO when changes happen so they can update all HR employment documentation.


Myth #3: My business is too small (or too big) for a PEO.

Truth: Companies of all sizes can benefit from PEO partnerships. The average PEO client has 22 employees, but that doesn't mean PEOs are not an option for smaller or larger businesses. PEOs help a wide range of clients, from start-ups with one employee to larger businesses with upwards of 1,000 workers. 


Why a PEO Might be a Good Fit for You

If you're a growing business looking to scale operations while maintaining a realistic budget, a PEO is a perfect fit for you.

Here are some common signs that it's time to partner with a PEO:

  • Surprise issues arise from incomplete employee paperwork;
  • Your competitors are poaching your employees by impressing them with five-star benefit packages;
  • New employees have missed out on enrolling for benefits;
  • Your company has been fined or penalized for compliance violations;
  • Employees are quitting on short notice;
  • You are too swamped with paperwork and HR duties to focus on the big picture of your company; and/or
  • Payroll duties are overtaking your staff's time.
    Image of two succesful business people conducting an interview to hire their next employee

Can My Business Benefit from a PEO Partnership?

If you'd like to learn more about how your business can benefit from a PEO partnership, contact Insogna CPA today. We’ve forged a partnership with Gusto to ensure that our clients’ HR duties never get left behind while simultaneously improving on small business accounting processes.

Let’s talk about how we can improve the employee experience at your company!