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Why Hire a PEO for Small Businesses

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If you are a small business owner, you know how hard it can be to manage all the different aspects of running your own business. From hiring and payroll to employee benefits and compliance, there is a lot to keep track of. But what if you could outsource these tasks? That’s where Professional Employer Organizations (PEOs) come in. PEOs provide an array of services that can help small businesses simplify their operations and free up valuable time and resources. Let's take a closer look at why Professional Employer Organizations are great for small businesses. 

What is a Professional Employer Organization?  

A PEO is an organization that provides outsourced human resource management services to small businesses. This includes payroll processing, employee benefits administration, worker’s compensation insurance, tax filing, and more. The PEO acts as an extension of your company, working with you to develop strategies to optimize your operations while ensuring compliance with relevant laws and regulations. Wanting to learn more about PEOs? Head to our all inclusive page covering this topic: What Is a PEO?

Copy of Leveraging Professional Employer Organizations to Benefit Insurance BrokersBenefits of Working with a Professional Employer  

Working with a PEO can bring many benefits to your business. For starters, outsourcing HR tasks can save you time and money—both in terms of wages paid out for staff members who would otherwise need to handle these tasks internally, as well as in terms of the costs associated with managing complex HR functions like payroll or worker’s compensation insurance. Additionally, PEOs can offer access to better employee benefits packages than smaller organizations may be able to provide on their own—this means happier employees! Finally, since PEOs specialize in helping small businesses stay compliant with federal, state, and local employment laws, they reduce the risk of costly fines or litigation due to non-compliance issues.  

Another benefit of working with a Professional Employment Organization is scalability. If your business grows quickly due to success or unexpected demand, it can be difficult to add staff quickly enough so that operations are not disrupted while still ensuring accuracy in bookkeeping or compliance with regulations. A PEO eliminates this worry by providing trained teams ready to help your business meet its demands immediately no matter how large or small they may be.

How Does It Work?  

When you work with a PEO, your business will enter into what is known as a “co-employment agreement”—essentially transferring certain HR responsibilities from your organization over to the PEO while maintaining control over key operational decisions such as hiring/termination processes or disciplinary actions. This agreement allows the PEO to serve as an extension of your team without actually taking on any ownership stake in your organization; instead, they act as advisors who offer guidance on best practices related to employee management while still allowing you full control over day-to-day operations.  



There are many advantages for small business owners when it comes to working with a professional employer organization (PEO). By outsourcing HR tasks such as payroll processing or employee benefits administration, small businesses can free up valuable time and resources so they can focus on expanding their operations and growing their customer base. Plus, access to better benefits packages for employees leads to improved morale across the board! Ultimately, partnering with a reliable PEO is one surefire way for small business owners seeking assistance in navigating the complexities of Human Resources management without sacrificing control over their daily operations.


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