The Complete Guide to Understanding PEO Services

Are you considering a PEO for your business? In today's environment—many businesses are because a PEO can help you: 

  • Attract and retain top employees 
  • Save several hours (up to 16 hours a week!) so that you can focus on revenue-driving tasks  
  • Access and offer competitive employee benefits at a more affordable price 
  • Keep you in compliance to avoid major fees and penalties  
  • Streamline processes and procedures with more efficient ways to complete tasks (boosts productivity and efficiency) 
  • And more: explore how a PEO can benefit your business in our blog, 9 Ways to Improve Your ROI With a PEO.

To learn more about what PEO services are and the best way to go about choosing a PEO that's right for you, keep reading! 

How Does a PEO Work?  

A PEO, or professional employer organization, is a comprehensive HR outsourcing firm your business can partner with to optimize your HR responsibilities and streamline your business processes. When you partner with a PEO, you enter into a 'co-employment' contract called a Client Service Agreement (CSA) that lays out all the responsibilities of both your business and the PEO. 

You still have complete control over business operations and the hiring/firing of employees. A PEO is simply here to help your SMB (small or mid-sized business) compete with large business amenities without the high costs.  

Key Services Offered by PEOs   

The services offered by your PEO will vary from firm to firm.  

However, the following services are key for your PEO: 

  • Human Resources (HR) support: HR support includes on-site and online HR training programs, customer employee handbooks and procedures, employee onboarding, and a streamlined hiring process. It also consists of an HRMS, or human resources management system, that makes your entire company's work life easier and better. For instance, you can focus more on strategic functions rather than administrative tasks.  
  • Payroll and Tax Administration: payroll management takes too much time. A PEO will handle everything from processing payroll checks and direct deposits and reducing paperwork and overhead to certifying payroll reports, answering employee inquiries, and filing forms.  
  • Employee benefits and insurance:  in addition to accessing comprehensive benefits packages like 401k, life insurance, voluntary dental plans, short-term disability, etc., that allow you to compete with the best companies in your industry, your PEO can enroll and administer employees in their benefit's plan, and respond to all questions, concerns, and claims. 
  • Workers' compensation: your PEO will negotiate and procure insurance coverage for workers' compensation, eliminating down payments, audits, and premiums, as well as help with claims management and return-to-work programs.   
  • Wellness: 79% of companies report a wellness program helping their teams be as productive as possible. This is because healthier and happier employees perform better, need fewer sick days, and experience less stress. Your PEO supports your team's wellness by providing individualized or group coaching and implementation strategies for your business's needs — examples include exercise plans, healthier lifestyle education, wellness event planning, nutritional education, body mass index (BMI) profiles, blood pressure screenings, flu shots, mental wellness, etc.  
  • Training and Safety: training and safety options include (but are not limited to) distracted driving awareness, electrical safety, root cause training, claims management, fire prevention and safety, emergency action plans, ladder safety, and customized topics based on your business's needs and assessments.  

Advantages of Using a PEO   

Still unsure what you get out of a partnership with a PEO? 

These four advantages can make all the difference for your small to mid-sized business: 

  1. Cost savings on HR and compliance-related expenses   
  2. Improved employee satisfaction and retention   
  3. Access to a broader range of benefits and services 
  4. Reduced risk of penalties and lawsuits  

Choosing the Right PEO for Your Business   

When choosing a PEO that's right for your business, there's one consideration you must not ignore: 

Not all PEOs are created equal

What you get from a large PEO firm will not be comparable to what you get from a small, more personal one. For instance, giant national PEOs are often known to treat their clients like a number because they have more clients. The problem here is that you don't get the customer service experience you need to ensure your business is a priority.  

On the other hand, a smaller PEO like PRO offers a personal experience that gives your business top priority. This means you get hands-on service and won’t be in line and on hold to talk with the next available representative. 

Either route you take, these steps for evaluating PEO services and providers can be helpful: 

  1. Find one that offers comprehensive services   
  2. Be sure they are familiar with industries like yours 
  3. Ask the right questions before committing to a partnership  

PRO Resources is here for you. Let’s have a conversation to discuss your business needs & goals and whether PRO is the right fit for you.

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