What is a PEO?


A professional employer organization (PEO) assumes the administrative functions of a human resources department and assists businesses with managing complex employment tasks such as employee benefits, payroll administration and tax processing, risk management, and workers’ compensation. Small and medium sized businesses use PEOs to improve workforce productivity and profitability.

Benefits of using a PEO:

  1. Strengthen buying power through “Employee Benefits Pooling”.


    PEOs help attract skilled workers, reduce turnover, and improve employee satisfaction. By pooling tens of thousands of employees, PEOs are able to negotiate comprehensive benefits at attractive rates, including:

    • Healthcare insurance
    • 401k retirement savings
    • Employee training

  2. Alleviate administrative responsibilities.


    As a PEO client, businesses don’t have to devote valuable time to dealing with responsibilities associated with payroll and tax issues. Skilled specialists will provide the following:

    • Payroll processing and reporting
    • Tax deposits and payments
    • W-2 preparation and year-end distribution

  3. Reduce HR administration costs.


    By outsourcing non-productive and non-revenue producing activities to a PEO, businesses minimize HR expenses while having more time to focus on maximizing profitability.

  4. Reduce employment liabilities and risks.


    PEOs direct and ensure businesses are compliant with government rules and regulations, and federal and state employment laws. Under the guidance of PEOs, businesses can avoid employment related lawsuits while reducing potential risks and costs.

  5. Provide time to focus on the bottom line.


    Management of “non-core” business functions is time-consuming. Establishing a relationship with a PEO helps businesses concentrate on core competencies which generate revenue and profit.

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Business today is undergoing drastic changes in human resource management. Driven by the needs of business owners seeking solutions to complicated employment-related issues, PEOs are leading the way as the staffing solution of the future.
SOI offers a free assessment to help businesses identify their human resource management needs. Contact us.

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Download "The PEO Revolution" infographic here.