What is a PEO Partner?

Are you drowning in administrative and other non-revenue-driving tasks? Research shows that at least one day each work week is spent on administrative HR issues as a small business owner. 

The solution? A PEO partnership! 

PEOs free up time and resources that can be used to focus on core operations. This means more time for you to focus on revenue-driving decisions and tasks and more time for your current HR staff to dedicate to the overall health of your business and team members. Keep reading to explore the benefits of working with a PEO, what it means, and how it works.  

Introduction to Professional Employer Organizations  

A PEO, or Professional Employer Organization, is a firm you can partner with to take on not only some of your HR responsibilities but also some of your liability and risks. They provide a range of human resources services to small and medium-sized businesses, such as payroll, employee benefits, risk management, and compliance support to their clients. 

The role of a PEO partner is not to take over ownership of your business. Clients still have complete power over the hiring/firing of employees and business operations.  

PEOs are simply here to: 

  • Relieve you of the burden of HR duties that take up too much of your time 
  • Help you attract and retain top talent 
  • Connect you with the most competitive benefits in the market at an affordable price 
  • Give you access to modern HR technology 
  • Protect your business from legal issues 
  • Improve your company's safety and culture 
  • Give you peace of mind 

What is a PEO partner?  

Companies that partner with a PEO enter into a co-employment relationship laid out in a contract, mitigating some of the substantial costs and liability that come with being a business owner. The roles and responsibilities of each party in the relationship are discussed and detailed in the contract. No employer rights, risks, or obligations are given to a PEO that an employer does not agree to. 

That said, the National Association of Professional Employer Organizations (NAPEO) cites the following as more specific examples of what may be the PEO's role in a contractual relationship with their client: 

  • Issues Form W-2s to employees using its Employer Identification Number (allows your team members to access PEO employee benefits like health insurance at a better premium) 
  • PEOs often report, collect, and deposit employment taxes with your local, state, and federal authorities (reduces error and ensures compliance) 

Services Provided by PEO Partners  

The following are services your PEO partner will likely offer: 

  • Human resources — training, employee procedures/manuals, employee onboarding, etc. 
  • Payroll and tax services — processing payroll checks and direct deposits, depositing state & federal withholding tax liabilities, filing 941 & 940 forms, filing & mailing W-2s, filing W-3s, providing detailed payroll reports, answering employee inquiries, and more. 
  • Workplace safety and worker's comp — employee training, risk management, workers' compensation, assigned risk manager, etc. 
  • Employee benefits & administration administers & enrolls employees in the PEO's benefits plans, provides tax advantage through section 125 plans, offers 401(k) or other retirement options, responds to employee benefits questions, claims, inquiries, and more. 
  • Wellness — reduces healthcare costs; increases productivity, morale, & self-esteem; lowers rates of absenteeism; reduces injury & accident rates 
  • Compliance — PEOs stay current on the latest state, local, and federal laws to ensure your business and employees are compliant. 
  • Technology that a PEO offers in the realm of HRMS (Human Resources Management System) — reduces reliance on paper documents, improves manual work with automation, and streamlines information to one source. 

Benefits of Partnering with a PEO  

The benefits of partnering with a PEO extend to not only employers but employees. For employees, PEOs offer employees in small to medium-sized businesses access to Fortune 500 benefits, better training, and a more structured and sound company culture environment.  

For organizations, a PEO offers the following advantages: 

  • Allows businesses to focus on core operations and growth  
  • Provides access to group health insurance and retirement plans  
  • Helps companies to stay compliant with labor laws  
  • Manages employee-related issues (performance, discipline)  
  • Saves employers on average $1,775 per year per employee, with an ROI of 27%! 
  • Companies partnered with a PEO grow 7-9% faster  
  • Partnering with a PEO makes your business 50% less likely to fail 
  • Experience 40% better revenue growth  
  • See 14-16% lower employee turnover rates 

PRO Resources is an industry-leading HR outsourcing firm committed to boosting your business's efficiency with the latest HR, payroll, and benefits platform. Lets’ have a conversation— talk with a trusted advisor about your business potential.