Professional employer organizations (PEO) are used by small and medium-sized businesses (SMBs), which may not be able to afford a standalone HR department, to access scalable and affordable corporate HR services and support. PEOs are co-employers, meaning they act as a parent company and become the employer of record for tax purposes. This enables SMBs to pool together to access enterprise-level benefits and rates on services such as health insurance, employee benefits, and payroll.
PEO providers often combine their services with a core HR software developed by the PEO and used by its clients. These platforms give clients tools for accessing a variety of HR functions, such as recruiting, payroll processing, and managing benefits. Many platforms include an employee self-service portal so workers can view paycheck information, enroll in benefits, and complete other tasks.
PEO providers are distinct from more specific HR outsourcing services providers, such as payroll services providers or training & development companies, which are often employed by larger companies with established HR departments that need to outsource an individual HR task.
To qualify for inclusion in the PEO Providers category, a product must:
Act as a co-employer to provide access to comprehensive benefits
Partner with businesses to minimize HR tasks
Manage compliance, including state and federal laws, protecting the company from potential fines and penalties
Provide employees HR support without the business having to employ an HR department
