What is a Professional Employer Organization (PEO)?

Running a small business can be challenging, especially when it comes to managing human resources, payroll, and compliance with employment regulations. However, there is a solution that can alleviate these burdens and allow small businesses to focus on their core operations.

Enter the Professional Employer Organization (PEO). In this blog post, we’ll explore what a PEO is and how small businesses can benefit from partnering with one.

What does a Professional Employer Organization do?

A Professional Employer Organization (PEO) is an outsourcing company that provides comprehensive HR solutions to small and medium-sized businesses.

What does a Professional Employer Organization do?

By forming a co-employment relationship, the PEO assumes certain employer responsibilities, such as payroll administration, benefits management, and risk management, while the small business retains control over day-to-day operations and decision-making.

Benefits of Partnering with a PEO:

1. Cost Savings:

  • Shared expenses: By pooling together multiple clients, a PEO can negotiate better rates for benefits packages, workers’ compensation insurance, and other HR services, resulting in cost savings for small businesses.
  • Reduced administrative costs: PEOs handle payroll processing, tax filings, and benefits administration, reducing the need for in-house HR staff and associated expenses.

2. Access to Expertise:

  • HR Support: PEOs provide access to experienced HR professionals who can offer guidance on compliance with employment laws, best practices in recruitment and employee management, and resolving employee issues.
  • Legal Compliance: PEOs stay updated on changing regulations, ensuring small businesses remain compliant with employment laws and minimizing the risk of penalties or lawsuits.

3. Improved Employee Benefits:

  • Comprehensive benefit packages: PEOs offer access to a wide range of employee benefits, including health insurance, retirement plans, and flexible spending accounts. Small businesses can provide competitive benefits to attract and retain top talent, without the administrative burden.

4. Enhanced Payroll and Tax Management:

  • Streamlined payroll processes: PEOs handle payroll calculations, tax withholdings, and filings, ensuring accurate and timely payments to employees and government agencies.
  • Reduced tax and reporting risks: PEOs assume responsibility for payroll tax compliance, reducing the risk of errors and penalties associated with tax filings.

Example: ABC Marketing and the Benefits of a PEO Partnership

ABC Marketing is a small digital marketing agency with 30 employees. They partner with a PEO to handle their HR needs. Here’s how they benefit:

  • Cost Savings: By joining the PEO’s larger employee pool, ABC Marketing gains access to more affordable health insurance and workers’ compensation plans.
  • Expert HR Support: The PEO’s HR professionals assist ABC Marketing in developing employee handbooks, providing training, and ensuring compliance with labor laws.
  • Comprehensive Benefits: ABC Marketing can offer its employees a competitive benefits package, including health insurance, retirement plans, and flexible spending accounts, improving employee satisfaction and retention.
  • Streamlined Payroll and Taxes: The PEO handles payroll processing, tax filings, and payroll-related reporting, saving ABC Marketing time and minimizing errors.


Partnering with a Professional Employer Organization (PEO) can be a game-changer for small businesses. 

From cost savings and access to expertise to improved benefits and streamlined payroll management, PEOs offer a range of advantages that enable small businesses to focus on growth and success. 

By delegating HR responsibilities to a PEO, small businesses can navigate the complex HR landscape with ease, ensuring compliance and creating a supportive work environment for their employees.

If you are considering partnering with a PEO, be sure to do your research and choose a PEO that is a good fit for your business.

The growing number of PEOs in the US makes it difficult to find the right one for your organization.

With over 700 PEOs currently operating in the US, it can be difficult to know where to start when looking for the right one for your organization. 

The Huldisch Group can help you bridge this gap by acting as your broker to find the right match.

We are PEO brokers who have a deep understanding of the PEO industry and can help you identify the factors that are most important to you in a PEO partner. 

We will then work with you to narrow down your options and find the PEO that best meets your needs.

Our services are free to you, and we are confident that we can help you find the right PEO to partner with.


We are compensated by the PEO providers & our service for you is free.