Monday, July 25, 2016

5 Reasons PEO Services Help Improve HR Practices

Employee Service Awards 20111209 002As a business owner, you have so many different items to attend to on a daily basis. You are concerned about marketing, clients, customers, competition, finances, employees and so much more. Even with a strong Human Resources department, finding and managing competent, qualified employees for your business can be a challenge. If you would like to learn about PEO services, here are 5 benefits of hiring a professional employer organization for your business.

1.  Save time and energy as a business owner by hiring a Professional Employer Organization. PEO companies specialize in handling all of the responsibilities, from beginning to end, that come along with hiring individuals. Since they are experts, they can handle all aspects of the hiring process, giving you lots more time to focus your attention on other aspects of your business. You will no longer have to schedule interview on the phone or in person, worry about performance reviews or other details regarding employees. You can still stay in the loop by communicating with the PEO company frequently, but a lot of the time consuming work such as sifting through resumes will be covered for you.

2.  Reduce your legal liabilities with co-employment. When you hire a PEO company, they are actually employing your staff as well. This means some responsibilities such as payroll, taxes or workers compensation will be their responsibility, while other obligations regarding employees with be shared between your business and the PEO.

3.  PEO companies are great for small businesses. PEO’s actually prefer to work with small businesses typically with a maximum of 150 employees, but more commonly, the businesses they work with only have about 20 people employed. Using PEO services enables small businesses to enjoy success since the PEO makes it possible for employees to receive benefits and insurance. The business would not be responsible for this, but the PEO would, and being a larger organization, it would be easier for a PEO to obtain these benefits and insurance policies for employees.

4.  PEO companies can help small businesses navigate both state and federal regulations. As a small business owner it is often difficult to keep up with changes and policies, however PEOs are on top of these items and stay current, helping your business to succeed. The PEO would also take a lot of the responsibility for these legal factors in regards to employees.

5.  Since the PEO has the right to hire employees, it also has the right to fire them. In some cases this is helpful, since it reduces the amount of unpleasant interactions a business owner has to deal with in regard to employees. On the down side, some small business owners may be irritated by this if there is an employee that is not working up to par. A business owner cannot simply fire this person, but must take additional steps to go through the PEO services and receive approval which can take extra time and therefore money.

While PEO services can provide many benefits to your company, it is always important to review any and all terms ahead of time before deciding upon a legal business agreement. Once you find the right professional employer organization, you will enjoy less HR responsibilities, and reduced liability regarding employees.


  1. You’ve made some decent points there. I looked on the internet for more info about the issue and found most people will go along with your views on this website.

  2. Interesting entrepreneur blog! Is your theme custom made? You definitely have a good mix of content and design.

  3. Great article. I am dealing with a few of these issues as well.

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