What Is a Professional Employer Organization (PEO)?

A professional employer organization (PEO) is an outsourcing company that provides a variety of operational and support services for businesses through co-employment. The PEO assumes a variety of tasks that may include payroll, HR functions, recruiting and hiring and many others. The PEO services provided to a business can vary depending on requirements and will depend on the contract between the business and the PEO provider.

Benefits and Risks of Using PEO Services

There are a lot of administrative duties involved in running a business and it is easy to get overwhelmed to the detriment of other areas of your business. One solution businesses should consider is PEO outsourcing. The following are some of the benefits of PEO HR solutions.

peo pros and cons
  • Better employee benefits and experience: a professional employer organization and human resources outsourcing company can often provide your business with a more extensive range of benefit options for your employees. PEOs will also be able to perform HR tasks such as processing claims more effectively making for a better overall employee experience.
  • Reduced costs: PEO firms can reduce the expenses involved in running your business. You can get better rates with benefits providers like insurance companies as well as eliminate the need for many in-house staff positions. 
  • Improved recruitment: PEO employment outsourcing services use experienced recruitment specialists who know where to go to find the talent you need. They will find you the best candidates for positions with the skills and experience you require. Additionally PEO employer services can include HR tasks such as on-boarding new employees and help improve employee retention.
  • Focus on your business: when you outsource HR and payroll tasks to PEO service providers you will have more time to focus on other aspects of your business such as sales and product development. 

While there are some definite advantages to using PEO vendors there are some potential risks as well. Some of the cons of PEOs include:

  • Less control: with a PEO firm assuming control of many of a business’s important administrative tasks some owners and managers may feel as if they are losing control of the business.
  • Less personal: not all PEOs are able to provide as high a level of personalized service to employees.
  • Sharing information: sensitive information about a business and its employees will have to be shared with the PEO.

How PEO Firms Work

When a business uses professional employer services they enter a co-employment relationship with the PEO. The PEO becomes the employer of record for your team and assumes responsibility for certain administrative tasks. Services they provide can include maintaining worker’s compensation coverage, processing payroll, withholding and paying payroll taxes, recruitment of employees, providing human resources guidance and handling other HR tasks. 

Companies working with a PEO maintain complete ownership and control of the business. While the PEO focuses on employment-related administrative tasks the company will conduct its regular operations providing products and services to its customers.

In some respects, PEOs are similar to HR outsourcing. Both PEOs and HROs provide human resource services. However, HROs tend to be a little more flexible in that they allow their clients to pick and choose only the specific services they want to outsource. Human resources PEO providers use the co-employer model and bundle many of their services. PEO’s also assume some liability while HROs don’t.

What Kind of Businesses Benefit from PEOs

Professional employer organization services tend to be used by small and midsize businesses most often. According to the National Association of Professional Employer Organizations (NAPEO), in the US alone PEOs provide services to 173,000 small and midsize businesses. This makes sense as PEO for small business provides employee benefits and HR services that they wouldn’t otherwise be able to afford. 

Businesses that are just getting started can also benefit from using a professional employer organization. PEO for startups can help with recruiting team members and handling administrative duties while you focus on building your business.

The fact is that almost any business regardless of size can benefit from using PEO’s. They can provide services for a wide variety of industries including:

  • Computer services and technology
  • Construction
  • Manufacturing
  • Retail
  • Transportation
  • Medical
  • Insurance
  • Real Estate
  • Wholesale
  • Finance
  • Agriculture

These are just a few of the many diverse industries that can benefit from working with a PEO. 

So what types of assistance can a business get from a PEO? Here are a few of the services a PEO can provide.

PEO Payroll Services

The PEO will handle payroll processing which includes collecting relevant data such as times sheets needed to calculate salaries. Depending on the agreement with the PEO taxes can also be calculated on employee compensation and necessary deductions made. PEO accounting can also provide clients with a file for employee salary disbursement and individual payslips. 


Your business could be subject to fines and penalties if you don’t comply with all the rules and regulations in the region you operate. PEOs employ specialists in compliance to make sure you are following tax laws and reporting requirements, regulations for workers compensation and other areas you are at risk of encountering compliance issues

PEO Consulting

PEO consulting services provide your business with advice and guidance on how to handle HR challenges. They can help you develop a strategy for streamlining HR processes and advise you on the best way to implement those strategies. Their specialists have expertise in HR policies and procedures and can advise you on any HR issues you may encounter. 

Employee Management

PEO staffing services are able to provide you with a full range of employee management services from recruitment of talent, to onboarding new employees, training, turnovers, payroll and more. They differ from RPO staffing services in that PEOs provide clients with complete employee services including training and payroll while RPOs only offer recruitment services while things like training and payroll are dealt with by the employer. 

These are just a few of the PEO services businesses of all sizes in a wide range of industries can benefit from.

How to Choose a Professional Employer Organization

Once you have decided to use a professional employer organization to handle HR administrative tasks the next objective is to find PEO companies that can meet your needs. The following are the basic steps for how to find reliable overseas outsource PEO providers.

how to choose peo provider
  • Determine your business needs: before you even begin talking to a PEO you should perform an assessment of different areas of your company such as HR and payroll to determine what services that your business specifically needs.
  • Check the background of the PEO: does the PEO have a good financial record? Some countries require PEO auditing of the provider’s financial statement by an independent agency. Even if audited financial statements aren’t legally required they demonstrate a PEO is well managed. You will also want to check the PEOs compliance and customer retention record.
  • Ensure the PEO can provide the services you require: the needs of every business are different and unique. You need to make sure that the provider offers the specific services that match your requirements. What is their benefits package? Do they handle payroll? Does PEO software engineering recruiting include onboarding? The PEO you select should be able to provide the full range of services you require.
  • Look for PEOs that operate in the country/region you will do business in: many PEOs tend to operate in specific countries or regions. A PEO operating in Europe may be able to provide services to North America but they may not. If your operations extend to more than one country you will want to know if their service and coverage extends to all the areas you do business.
  • Familiarity with local laws: the PEO should be familiar with the local laws where you are operating to ensure you are in compliance with all regulations that you need to be to avoid penalties.
  • Look at PEOs technology: your company will have access to the PEOs technology platform when you work with them. You will want to know if the PEO software providers they use have a platform that offers an efficient system for reporting and is easy to use. The platform will be used for a variety of things such as payroll functions, employee benefits and others and you need to be sure it can be operated efficiently by your personnel. 
  • Customization: some PEOs only offer standard packages while others will tailor their services to fit your needs. Find out if they are able and willing to provide a customized approach and make adjustments in the future as your business grows.
  • Cost: obviously the cost of services will be a major consideration when choosing a PEO. You should get the price breakdown for services so you can compare with other PEOs.

Why Consider Our PEO Staffing Company as a Trusted Outsourcing Partner

Our company provides international professional employer organization services to assist your company with all of its hiring needs. From sourcing and recruiting your staff to onboarding and training we will assist you with every step of the process and ensure all of your requirements are met.

There are many companies out there offering PEO services to businesses and it can be difficult to select the right one. Here are some of the reasons to choose us as your trusted outsourcing partner.

  • Cost-effective: we are a Ukraine based company and the salaries for our specialists compared to those in Western Europe and North America are significantly less for the same skill and experience level. Many associated expenses will be less or eliminated as well.
  • Skill and experience: we have access to a large pool of skilled talent with experience in diverse industries and will be able to quickly recruit the specialists you need, even those with hard to find skill sets. All candidates are thoroughly vetted and their qualifications verified. 
  • Flexible: every company is different and we know that there is no single solution that is suitable for every business. We tailor our services to fit your needs and can adapt to changes in your requirements as needed.
  • Multi-lingual: all of the specialists we hire are proficient in the English language. Many of them our fluent in other languages as well.
  • Scalable: as your company grows we are capable of meeting your expanding needs while maintaining the same high level of service.

In addition to PEO outsourcing we provide a variety of BPO services including customer support teams and back office support services.

choose relaible peo services provider

How Our Professional Employer Services Work

Our PEO outsourcing process is efficient and enables us to recruit the qualified specialists you need quickly and easily. It consists of the following basic steps:

  1. Candidate selection: guided by our client’s ideal candidate profile, we recruit well qualified and experienced candidates that match the desired requirements. A qualifying test task is given to the candidates and they go through a series of interviews. Offers are made to those candidates who made it through our screening process and who meet with our client’s approval.
  2. Onboarding: after an approved candidate has accepted an offer we provide help with the onboarding stage. This includes supplying employees with all the tools and resources they need to achieve peak performance.
  3. Staff retention: the best results occur when both client and employee are satisfied with the working relationship. We ensure that the staff we provide remains highly motivated and that all contractual commitments are met so that the client’s needs are fully satisfied.

For better employee recruitment results and higher retention rates contact us to learn more about our PEO services!