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What Are the Advantages of a PEO for an Employer to Consider?

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Professional Employer Organization, or, PEO, can provide many advantages to any company with employees of almost any sizeOutsourcing the following tasks to a PEO can save the company both time and money while maintaining improving relations with its employees. 

Some examples of their advantages are: 

  • Benefits procurement and administration 
  • Payroll processing, taxes, and all filings 
  • Retirement plan procurement and administration 
  • HR compliance and management of daily transactional issues and tasks 
  • Workers’ compensation procurement and administration 
  • Lawsuit avoidance – mitigation of employment-related liability 
  • Recruiting guidance or assistance 

 

Benefits: 

One primary goal of a PEO is to provide employees access to cost-effective, comprehensive benefits without overwhelming regulatory burdens. A PEO poses a wide variety of benefits to employees, such as healthcare, dental and vision coverage, and disability benefits. The PEO will handle all tasks relating to such services, including automated benefits election, benefits administration, and open enrollment.  Working with a single provider of multiple benefits within a PEO relationship can eliminate working with multiple vendors, juggling renewal dates, and battling rising rates. 

 

Payroll Processing: 

The key to the PEO partnership is payroll processing.  The PEO handles all payroll processing, taxes, filings, PTO Management, garnishments, reporting and much more all through a powerful automated payroll processing system.  Certain levels of access to the payroll engine are granted to both the employees and management and changes can be made in real-time.  Since much of this data is shared with multiple employee-related documents, this makes onboarding easy and convenient, as the payroll engine shares some of this common data with the HRIS side of the same powerful software. 

 

Retirement plans: 

A PEO can provide access to proprietary retirement saving programs, including 401(k) plans, which may help employee retention. Many of these are structured as MEP (Multiple Employer Plans) that are only accessible through a PEO partnership relationship. The PEO will manage all the regulatory requirements, such as compliance testing, distribution processing, and distribution of the required notices. Many also offer an Investment Advisor service that can help educate the employees on their best available options for managing their retirement plan. 

 

HR compliance: 

Employment law is complex and always changing; one small mistake can cost the business thousands of dollars. A PEO can provide guidance and help avoid these sorts of issues to prevent large fines. As every state has different rules and regulations, it is imperative to know their particular law; a PEO can resolve this issue with seasoned HR professionals. A PEO will grant access to trusted advisors who keep the company aware of regulatory updates and guide the business towards the right path. 

 

Workers’ compensation: 

Insurance premiums and claim management make workers’ compensation costly and time-consuming. A PEO can provide the workers’ compensation coverage to your employees through their own program or through a broker partner and handle all the respective paperwork associated with these programs. 

 

Lawsuits: 

A single lawsuit can devastate a business, so it is imperative to know your potential liabilities as an employer. A PEO may share liability when it comes to specific employment-related claims, such as wrongful termination. A PEO can provide expertise from a team of professionals to help mitigate a potentially hefty settlement; they can ensure the agreements are in compliance with state laws. However, it cannot replace legal counsel. Think of it as additional layers of defense. 

 

Recruiting: 

Nowadays, positions open up quickly, and companies always need to find capable candidates for their openings and quickly A PEO can offer a wide variety of recruitment assistance and even provide recruiting services, as an outside staffing firm would provide to help fill your openings Reviewing the recruiting capabilities of a potential PEO partner beforehand could provide tremendous value to your company.  

Overall a PEO provides many advantages to the employer and can provide cost stabilization for the business while helping it grow. It allows the business to focus on the core issues while the PEO handles the administrative, non-revenue generating activities. 


There are many advantages of a PEO for an employer to consider. Kismet has the expertise to help your business today! 

To find out more about PEO services, click the button below!

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