5 Benefits of Working With a Professional Employer Organization

Working with a PEO can help you retain the best employees and reduce costs. In addition, PEOs can provide HR expertise and flexibility for your business. Plus, you can have peace of mind knowing that your company’s employees’ data is secure. Despite the benefits of working with a PEO, it’s not always the right choice for every business. Before deciding to hire a PEO, here are some things to consider:

Cost savings

While most PEOs charge a flat monthly fee per employee, some also charge you for payroll tax fees. SUTA, or state unemployment tax, is a 6.2% payroll tax that employers pay on the first $7,000 in an employee’s wages. This fee is typically hidden in the fine print of the PEO’s agreement, so it’s important to understand the details. If you’re unsure, contact your prospective PEO to ask about its fees.

When working with a PEO, your business will receive numerous benefits. These include reduced employee turnover, reduced costs, and compliance violations. Moreover, you will be freed up to focus on growing your business. A PEO can help you prevent these issues and ensure that your business remains profitable. In addition to the financial benefits of partnering with a PEO, you’ll also enjoy the lower risk of employee lawsuits or losing your best employees to competitors.


Flexible services are the hallmark of a PEO. These providers have access to a wide range of resources and can quickly adapt to changing market conditions. For example, they can change working hours or reassign workers when necessary, or adjust salaries and benefits packages. This gives your business the flexibility to remain competitive in the global marketplace. If you’re looking for more flexibility in your HR services, a PEO may be the right choice for you.

Having more flexibility within the workplace can increase your employee’s happiness and reduce stress. Not only will you have a healthier work-life balance, but you’ll be able to embrace change and experience new things. It might even help you discover new career paths that you never thought possible. Regardless of your industry, embracing flexibility will improve your bottom line. If your employees can choose when they want to work, you can keep their schedules as flexible as possible.

HR expertise

While you can’t replace an internal HR team, you can use PEO services to help you develop an effective HR infrastructure. If you’re a small business, leveraging HR expertise from a PEO can help you navigate the complex regulatory landscape of employment. In addition to reducing costs, a PEO can help you build an effective HR infrastructure. The following are five benefits of working with a PEO:

Hiring an in-house HR professional can cost your company $100,000 or more a year. PayScale tracks the national average salary of HR professionals. That doesn’t include taxes and benefits. Hiring an internal HR manager to handle these tasks can take up too much time and money. Meanwhile, a PEO can delegate tasks like payroll and benefits administration to a smaller team. Moreover, hiring a PEO can help you avoid costly penalties for non-compliance with employment laws.

Employee data security

Information security is a top priority for professional employer organizations. Unfortunately, many PEOs are still storing PII outside their network and sending it via email. An HRIS system should be used for all employee data transfers and should be encrypted both in transit and at rest. While this does add to the overhead, it also provides reasonable assurance to clients. Let’s look at some common security problems that PEOs face.

One of the biggest security issues for PEOs occurred when a security breach occurred with PrismHR, a cloud-based provider of human resources software. It caused the security of data for hundreds of thousands of PEOs to go down, but it had no effect on the PEOs that host their own software. This security vulnerability impacted many cloud-based PEOs, but it did not affect those that host their own proprietary software.