6 Frequently Asked Questions About PEOs

Most businesses that can benefit from a PEO partnership don't know much about PEOs. PEOs help manage HR, reduce daily paperwork, solve compliance and safety issues, and much more. However, the partnership goes beyond assistance with administrative tasks, offering small and mid-sized businesses access to large business amenities like the opportunity to scale seamlessly and get great benefits at an affordable rate.  

Studies have even shown that companies that partner with a PEO are 50% more likely to stay in business. With only 15% of new companies making it past the 15-year mark (65% fail before 10), this can make a substantial difference.  

Here are answers to the most frequently asked PEO questions. 

1. What is a PEO? 

A PEO, or a professional employer organization, is a firm that relieves the burden and stress of human resources tasks. This partnership acts as additional support to your leadership and crew—not as a replacement. As a result, the PEO assumes many responsibilities, risks, and costs (liability, benefits, etc.). 

The National Association of Professional Employer Organizations (NAPEO) explains it best, "The roles of the PEO and the client depend upon the facts and circumstances of each relationship...Each party will be responsible for certain obligations of employment. While both parties might share responsibility for other obligations and be 'an' employer, neither party is 'the' employer for all purposes." 

2. What services should I look for in a PEO? 

One of the first questions to ask a PEO when determining which company will make the best partnership is what services they will provide. Every PEO will be different.  

However, the following services are a must-have: 

3. What's the difference between PEOs and employee leasing services? 

An employee leasing service is a partnership you undergo with a staffing firm that will provide you with the employees you need temporarily (usually project-specific). In a PEO partnership, on the other hand, employees are employed by both parties—you and the PEO. You maintain control over hiring/firing (although PEOs can assist), employee roles, and business operation decisions.  

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4. What's the difference between a national-level PEO and a regionally focused PEO like PRO Resources?  

The most significant difference between national and regional PEOs is customer service experience. With a national-level PEO, you may gain exclusive access to more advanced technology and benefits, but you won't quickly contact them for assistance, questions, etc. It may even take days to get problems addressed and resolved because the company handles a substantially larger load than a regional PEO.  

In this case, you cannot be the priority.  

On the other hand, local PEOs pride themselves on customer service and being available for assistance when needed. It's not even unheard of for clients to be able to reach PEO CEOs directly because they're more personable. In these cases, you are the priority. 

Take, for instance, A PEO like PRO Resources,  they are “different” — giving you access to top of the line technology and yet are more hands-on and definitely more personal — where you won't be just a number… (What a novel idea, a company with people you can actually talk and interact with!). With a PEO like PRO, our team will be an extension of yours. 

5. How does a PEO partnership work? 

Your PEO partnership will start with a contract documenting all the services you require from the firm and other co-employment relationship details. You will still have complete ownership and control of your business. However, the PEO will play an important role in everything employee-related, from employment taxes and payroll to company culture, employee benefits, and HR guidance. For small-to-medium-sized businesses, this means greater financial and legal protection against employee lawsuits, workers’ comp, tax penalties, etc., because the partnership expands your coverage at a cost you can afford.   

6. Does a PEO save me money? 

Yes! A PEO can save your company money in many ways. Here are just a few of the most significant ways your company can be more cost-effective with a PEO: 

  • A PEO increases ROI (in cost savings alone, 27.3%) 
  • Don't have to hire an internal team  
  • Faster growth (7-9% faster) 
  • Lower employee turnover (10-14% lower) and, therefore, fewer turnover costs 
  • Access to lower insurance rates 
  • They help avoid non-compliance fines and fees 

A PEO Partnership with PRO Resources 

You get all of these savings and more with PRO Resources. Now, the question is not whether to outsource or not to outsource (your Human Resources administration). The question is what PEO will you choose? Contact our team, and talk with real PEOple. We'll get started by discussing your HR needs and expectations so PRO can ensure you're getting the best possible services and guidance.