What is a professional employer organization (PEO)?

What is a professional employer organization (PEO)?

A professional employer organization (PEO), also known as a co-employer, allows small and medium sized enterprises (SMEs) the HR benefits that are usually reserved for large corporations. A PEO will take on the legal and administrative human resource requirements for a company and due to the aggregation of scale, your employees will be entitled to better and more comprehensive benefits.

Who should use a PEO?

Small and medium sized businesses benefit most from using a PEO because they are often not able to administer high quality human resources while focusing on the company’s offering.

They are useful in many industries such as;

  • Real estate and property management
  • Computer services
  • Securities brokers and dealers
  • Engineering services
  • Health services
  • Legal services
  • Management consulting services
  • Business services
  • Accounting, auditing, and bookkeeping
  • Manufacturing
  • Plumbing/HVAC
  • Electrical
  • Insurance
  • Wholesale
  • Not-for-profits
  • Technology

Is PEO right for your company?

Here are some questions to ask yourself, if you answer yes to any of these then PEO may be right for you:

  • Is HR administration taking up more time than you would like?
  • Are you behind on compliance on updates to employment regulations?
  • Is it a challenge for your company to recruit, develop, and retain the right employees?


  • Compliance support, ensuring that companies are compliant
  • Cost savings on employee benefits that the company alone would not be able to provide
  • Cost savings when hiring by utilising the PEO’s resources
  • They offer protection against risk, associated with mistakes and non-compliance in payroll and HR-related operations
  • Your PEO will stay updated on any regulatory changes
  • Gain HR support without increasing headcount
  • Help your company attract and retain staff

The benefits offered by a co-employer is essential for SMEs that want to improve the quality of employer they are in an affordable way. This takes away the extra administrative tasks from an SME that usually already have limited human resources and ensures they are compliant, therefore reducing risk of non-compliant penalties and fines.