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What is a PEO and Why Do I Need One?

October 12 2015 / PEO Definitions

Dealing with employee paperwork and administering payroll can be a challenging and stressful activity even for a seasoned entrepreneur or company’s leader. HR-related issues are amongst the largest problems a business can experience and can hinder your progress in term of growth and revenues.

Not having the time or capability to deal with your employees’ needs and paperwork should not be a reason to overlook these duties. It doesn’t mean that you have to juggle a dozen things at once, either – instead, the sensible thing to do will be to hire a professional PEO. PEO, or a professional employer organization, is a company that can handle all of your HR needs. This includes, but it’s not limited to, payroll and administration, workers’ compensation insurance, employee health and retirement benefits, as well as state and federal compliance issues. A PEO can help you with a vast range of concerns and challenges.

What a PEO basically does is help your company establish and provide comprehensive and affordable payroll. What’s more, since PEOs usually manage thousands of employees at once, they can also purchase insurance and benefits plans at more competitive prices. Apart from saving you money, this also enables you to offer a higher-quality plan and attract and attain your skilled employees. A PEO can take care of all of your employee benefits, including life insurance and personal accident insurance, retirement plans, dental, medical and vision coverage, short-term and long-term disability insurance, adoption assistance, even educational and commuter benefits and assistance.

The savings on health and benefit plans are usually enough to outweigh the costs, associated with hiring a PEO, but these companies can offer your business a range of other opportunities, as well. Simply by assisting you with all of your employment-related regulatory compliance, a PEO can prove its worth to your company in more aspects than simply the money you’ll be saving on benefits costs. As experienced professionals in HR, they can handle all of your payroll, risk management or policy needs and address all aspects of the employee administration and management. Your PEO can also provide your employees with HR manuals and ensure that the policies and procedures are in compliance with the state and federal laws and regulations. As the latter tend to change on a regular basis, being familiar with them is essential for the success and growth of your company. Moreover, the PEO Company will also help you manage multiple liabilities you may have as an employer, including termination assistance, substance abuse preventing services, employment verification and more.

Many companies hesitate to hire a PEO, simply because they’re not familiar with the way PEOs operate. When you hire a PEO, you’re entering what’s known as a “co-employment relationship”. This basically means that your PEO will take a number of your employee-related responsibilities, while you’ll still remain the primary employer of your business on a day to day basis. Most of these companies operate as a “one-stop shop”, providing assistance and solutions for all of your HR-related needs.

In addition, you can also rely on them for help with the recruitment and even the training process, and they can be extremely useful, if you’re planning to expand your business and create more shops and offices in the area. A PEO can design a unique and custom-tailored recruitment process and plan that will fit your company’s needs. The PEO can also assist you in developing job descriptions, conduct wage and salary surveys and generally improve the way your managers handle the interviews. This is especially useful, if you’re a start-up or a small business that’s planning to expand by recruiting qualified and skilled staff.

What’s more, due to the nature of the co-employment relationship with your PEO, your business will effectively mitigate any risks, associated with human resources. These include I-9 requirements, correctly filling in and deposing taxes with the state and the federal authorities, as well as claim resolution and EEO reporting.

It’s important to understand, however, that the PEO won’t replace your current HR staff. Instead, it will align with it in order to make use of its expertise and offer additional assistance and advice, where needed. A good PEO will employ HR staff with experience in different industries and various employee-related issues and can prove invaluable in complex situations, as well as in helping you increase your employee engagement.

Of course, when hiring a PEO, you need to do your due diligence. A good PEO will have a custom-tailored approach, as well as be financially responsible and stable. We at VanStone, for instance, have a specific qualification procedure and we vet our PEOs carefully through a propriety 100+ point process. Having a responsible and dedicated PEO can greatly enhance your employee engagement and activity and contribute to the success of your business.

As you can see, hiring a PEO is a financially sound solution and a decision that can prove incredibly beneficial in the long term. The unique position of the PEO enables them to offer you employee health and benefits packages at a more competitive price, thus allowing you to offer higher-quality benefits and attract more skilled employees. Your PEO can also greatly assist you in administering payroll and take care of all of your HR liabilities, including making sure all of your policies and procedures are in compliance with the state and federal regulations. The co-employment relationship between you and your PEO can prove invaluable during your time of cooperation, helping you successfully perform the responsibilities you have as an employer, without having to neglect or overlook your business.


Previous Posts


What is a PEO and Why Do I Need One?

October 12 2015 / PEO Definitions

Dealing with employee paperwork and administering payroll can be a challenging and stressful activity even for a seasoned entrepreneur or company’s leader. HR-related issues are amongst the largest problems a business can experience and can hinder your progress in term of growth and revenues.

Read More



PEO's to Utilize Business Tax Credits

July 9 2015 / PEO News

ALEXANDRIA, Va., July 8, 2015 /PRNewswire-USNewswire/ -- The National Association of Professional Employer Organizations (NAPEO) today hailed the enactment of a New Hampshire bill that will allow small business clients of professional employer organizations (PEOs) to take advantage of the state's business enterprise tax (BET) credits. It was signed into law yesterday by Governor Maggie Hassan (D).

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