Professional Employer Organizations

Professional employer organizations (PEOs) are organizations that specialize in human resource (HR) outsourcing solutions. With human resource management becoming an increasingly elaborate and complex task due to constant changes in government regulations, businesses of all sizes have felt the need for expert assistance to offer advice on, assist in, or even assume their HR responsibilities.

Companies find HR management a huge drain on their resources, especially in allotting HR administration to their staff who could rather work on making the business function more profitably, focusing on the revenue earning tasks of the business. PEOs offer cost efficient service, and when they take over the management of human resources from their client companies they leave the latter with the time and resources to focus on their core tasks and increase the earnings of their business.

Professional employer organizations typically offer human resources administration, payroll and tax administration, employee benefits administration, workers’ compensation administration, risk management, regulatory and government compliance and recruitment and selection services. Their services, apart from being economical, are also generally flexible with the needs of the client company and seek to complement its short term and long term objectives.

Professional employer organizations, in most cases, establish a co-employment relationship with the client companies by which they manage the employees and the risks, while the client companies exercise control over their responsibilities at the workplace. The PEO and the company serve as co-employers. This co-employment model takes much of the load off the back of the client companies, with the PEO effectively sharing the employer responsibilities.