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A Professional Employer Organization agreement may seem riskier, but for many organizations, it is better than a standard HR outsourcing agreement. A qualified employer organization lowers your insurance plans through a co-employment agreement. In contrast, an HR outsourcing firm offers an “à la carte” agreement.

1. What is a Professional Employer Organization?

A Professional Employer Organization (also called PEO) is a human resources outsourcing organization that acts as your collaborator. In this agreement, your skilled employers’ organization shares all the risks associated with your trade and receives lower premiums for health insurance and workers’ compensation. 

A Professional Employer Organization specializes in connecting small companies like yours to business and health insurance plans that might otherwise struggle to pay. Your PEO must also handle payroll on your behalf; even adding more HR services to your contract if you wish. In any case, since your PEO acts as your collaborator, they will take care of all the time-consuming administrative tasks that are constantly associated with human resources. 

Although your main employer’s organization is your co-worker, it has no influence on how you run your business. Yes, you can interfere with any needs of the HR department, but they cannot perform your real job duties for you. Even with the consent of our co-worker, we can continue to manage your business in exactly the same way as before.

However, it is understandable to worry about a co-worker getting ahead of your business. This outcome is unlikely and guaranteed not to happen if our PEO is certified by the IRS or Employer Services Guaranty Corporation. PEOs with these certifications must adhere to firm standards that make the organization’s business credible.

2. What is an HRO company?