What Kinds of Businesses Use PEOs? 

You may be wondering if partnering with a professional employer organization (PEO) is the right decision for your company. Is your business the right size? Are you in the right industry? Should you take this new or stay where you are in the months and years ahead? 

Businesses that typically use PEOs are those that employ between 10 and 99 employees. As reported by the National Association of Professional Employer Organizations (NAPEO), 173,000 of these companies have chosen this option. 

Organizations in a wide range of industries work with PEOs – and in many cases, so do those with workforces of fewer than 10 or more than 99. Whenever a company feels the burden of handling human resource administrative matters and/or lacks the necessary time or bandwidth, it’s a good time to consider a PEO. Even if a business already has an in-house HR department, a PEO can prove to be a time, money, and resource saver. 

The value of partnering with a PEO

A Closer Look at PEO Services 

PEOs work with client businesses by entering into a co-employment arrangement and providing a full spectrum of HR services, saving companies significant amounts of money. Areas where a PEO can be especially helpful include: 

• Payroll and related tax administration: Especially as your business grows, you know how mind-boggling and time-consuming payroll management and paperwork can be. By working with a PEO, you can hand time and attendance, paid time off, overtime, wage garnishments, and all the rest over to experts who are well versed in all applicable guidelines, laws, rules, and regulations. 
• Compliance: In addition to payroll matters, compliance issues spill over into multiple areas; namely, Affordable Care Act requirements, to name just one. And like many aspects of legal compliance, these mandates often vary from state to state – so utilizing a PEO is also very helpful for companies who fall into this category. 
• Benefits: Via their co-employment model, PEOs combine client employees and gain valuable bargaining power when it comes to securing competitive employee benefit offerings. Often, this enables smaller employers to compete successfully with much larger companies as they vie for talent in what has become an increasingly tight market. As an added plus, PEO specialists can also manage and administer employee benefits, from plan negotiations and open enrollment to handling employee inquiries and communication. 
• Workers’ compensation: Failure to have the proper workers’ comp infrastructure in place can lead to costly legal battles and fines. PEOs also have wide experience in this area. From developing safety manuals and procedures to assisting with claims management, a PEO may be able to help you lower your number of incidents and costs. 
• Risk management: As co-employer, a PEO assumes part of the liability and risk associated with your workforce, so clients can rest assured their risk profile will be well handled. 
• Other HR services: Recruiting, training and development, employee handbooks, and HR policies and procedures are among the additional functions a PEO can handle. 

Want to know more about connecting with a PEO?

To learn more about working with a PEO or to explore the best HR partnerships for your company, contact Key HR today. We are aligned with industry-leading PEOs and other preferred providers to offer customized solutions to all our clients’ talent management needs.