What is PEO and advantages of using a PEO for your business

More and more businesses are entering the market each day. The success of a business is dependent on how quickly it captures the market and expands its customer base. There are lots of startups that have a lot of potentials to grow but the one thing that slows down their growth is their inability to manage human resources. This is because it is easy to manage a limited number of people when you are working at a single location. But it is very difficult to manage human resources when you have branches in multiple locations in different parts of the country or across the globe. This is true especially for small businesses that are looking to expand their business. In such cases, they can approach a PEO to handle their human resources.

This article will help you understand what is PEO and the advantages of using one for your business.

What is PEO?

PEO is short for a professional employer organization. A PEO is a firm that provides human resources services to small and medium-sized businesses. Firms like this handle things like workforce management, training, health benefits, hiring employees, and much more. You may think about how they are helpful for a person who owns a business. So let’s take a look at an example. Just imagine that you have a business. You are doing good and want to expand to other parts of the country. It is easy for you to manage two or three locations but after that, it becomes difficult to manage everything. You cannot look at everything from payrolls to hiring employees to sales. Because of all these other tasks, you cannot focus on your business goals completely. That’s when you will need the help of a PEO/Employment Outsourcing firm to run your business effectively.

Saves time

This is one of the biggest advantages of using a PEO. You will be saving a lot of time as you would be delegating work to this third-party organization. Even the risk of delegating the work is low because you will not be hiring them to handle revenue-generating activities. These firms are highly efficient in handling time-consuming tasks like creating a good payroll system, filing and tax reporting as well as other administrative tasks. Using a PEO gives you extra hours in a day which can make you more productive. 

Helps you focus on goals

Once you have outsourced your non-revenue generating tasks you will have fewer things to take care of. So you will be less stressed about managing your business. This will help you in focusing more on the things that you actually want to accomplish. Every business has a target that it wants to reach but the burden of handling all the tasks slows them down. But once you start using a PEO you will be able to come up with ideas to make your business better. You can focus on things like increasing revenue and growing your business.

Business expansion

Business expansion is one of the signs of a successful business. But if you want to expand your business without any difficulties then you must use a PEO. This is because these firms have experts who know about the markets in different parts of the world. There are lots of opportunities in different countries across the globe. A PEO will help you in understanding the market you want to enter. Not only that but it helps you in knowing about the costs and benefits of expanding to other countries. It handles all the activities according to the people that are available over there. So you don’t have to worry about administrating employees from other countries.

Hiring employees

Hiring employees is one of the most important tasks if you want your business to succeed and keep growing. A business is as good as its employees. You want employees who are good at what they do and work hard. But finding employees is not an easy task especially if you want good ones. Hiring employees at a new location is a time-consuming process. It is even more difficult if you want to expand your business to other countries as you have to hire the best employees among the locals. As an employer, you can go to a new location to hire employees every time you expand your business. Using a PEO will make this task easy. They will make sure that your business starts operating by hiring employees on your behalf. 

Managing payrolls

Only a business owner will know how important it is to manage payrolls properly. If you don’t have a good payroll system then you will face a lot of problems in your business. A PEO can manage payrolls efficiently whether they are local or international. It is a very useful service for businesses that have branches in other countries. You don’t have to worry about the employees getting paid. When you use a PEO they make sure that all your employees are paid on time. 

Compliance with local employment laws

The employment laws in every country are not the same. These laws change depending upon the country. So you will be in trouble if you do not comply with the local employment laws of a country. A business owner may be aware of this but the problem is that they will not know what exactly the laws are. Above all when you are managing a business you will not have the time to understand the employment laws and regulations of every country where you want to expand your businesses. This is where PEO is very helpful. They will have complete knowledge about the employment laws of the country. So they will make sure that all your business practices are compliant with the local rules and regulations. This will ensure that you don’t run into any legal issues.

Saves money

This is something that many small businesses don’t understand about PEOs. They think that they lose money by using a PEO but it is actually the opposite. PEOs are great at cutting costs and saving money at places that you would have never imagined. They can save money on health care plans, processing payrolls, and other stuff. They will do this without affecting the employer or the employees. 


A business that uses a PEO offers more benefits to the employees at lower costs compared to the ones that don’t. Using a PEO will help small and medium businesses to focus more on revenue-generating activities. Small businesses grow faster if they use a PEO. According to a study, a company that uses a PEO is 50% less likely to fail. So if you are looking to expand your business and reach out to more potential customers then contact a PEO right away.