Professional Employer Organizations (PEO)

Best Professional Employer Organizations (PEO) include:

Papaya Global.

Professional Employer Organizations (PEO) Overview

What are Professional Employer Organizations?

Professional Employer Organizations (PEOs) are HR service providers that outsource most or nearly all of a business’s HR functions. They offer organizations a combination of HR software and professional services, such as payroll processing and tax compliance assistance. PEOs are primarily used by small to midsized businesses. Their goal is often to be able to manage the full employee lifecycle administration at a company through the PEO’s software platform and services.


PEO’s function primarily as co-employers of clients’ employees. More specifically, PEOs will often be the “employer of record,” primarily for tax and benefits purposes, but also to share a range of employer responsibilities with the client company. These responsibilities range from administrative tasks, like payroll processing, to material provisions like benefits options and coverage.


PEOs provide several key benefits for smaller organizations. They reduce the need for larger in-house human resources teams. PEOs can often offer better benefits options to employees at smaller companies by leveraging economies of scale across many small businesses that collectively work with the PEO.


PEOs vs. HR Management Software

PEOs and HR management software platforms can look very similar and overlap in many technical areas. For instance, they both provide the software tools for conducting and managing a business’s HR processes. However, HR management software leaves the HR administration and management processes themselves to companies’ internal HR personnel. In contrast, PEOs go a step further by outsourcing and automating many, or most, of those processes entirely. However, PEOs are less likely to have some of the strategic HR tools, like specialized performance management tools.


PEOs may be more expensive than HR management software as single budgetary line item. However, PEOs argue that the additional costs are offset by the reduction in in-house HR costs a company shoulders with a standalone HR management system.


PEO Features and Capabilities


There are common capabilities and offerings across all PEOs. While PEOs may specialize in certain areas, they should have at least a presence in most or all of these capabilities:


  • Payroll Management

  • Benefits administration (401k, health insurance, etc.)

  • Risk Mitigation

  • Employee Self-Service

  • Onboarding

  • Tax Administration and Filing

  • Leave and Attendance Management

  • HR Expertise and Consulting

  • HR Regulatory Compliance

  • HR Reporting



PEO Comparison

When comparing different professional employer organizations, consider these factors:


  1. Benefits offerings: How competitive is each providers’ benefits options? This is one of the prime advantages of working with a PEO, but the details of what each PEO offers can vary. Companies should pay particular attention to the likely needs of their current and future workforces, as different benefits plans will be more or less competitive depending on those workforce demographics.

  2. Pricing: PEOs can range in pricing from 3% to 15%+ of a company’s gross payroll. Given the outsourced costs around insurance and benefits coverage, the annual costs are also likely to change year over year. Companies should bay attention not only to the up-front costs, but also how pricing and costs have changed annually.

  3. HR Expertise: Smaller organizations in particular benefit from the outsourced expertise and knowledge that PEOs offer. Understanding how high quality and up-to-date a PEO’s expertise and support staff are is crucial information. Consider reviewers’ experiences leverage an organization’s HR expertise for the best insights into comparing PEO’s in this area.


Start a PEO comparison

Pricing Information


PEO pricing is usually on a per-employee basis, either by pay period, month, or year. While most PEOs don’t publicly disclose standard pricing, most estimates place PEO pricing on a per-employee basis from $900-$1,500/employee/year. Some PEOs also offer pricing as a percentage of gross payroll, often from 3%-15% of payroll at the higher end.



Professional Employer Organizations (PEO) Products

(1-10 of 10) Sorted by Most Reviews

TriNet

TriNet

Customer Verified
Top Rated

TriNet provides small and medium size businesses (SMBs) with full-service HR and payroll solutions tailored by industry. TriNet also offers specialized services through client access to HR representatives for advice and notifications on impactful regulatory changes.

ADP TotalSource

ADP TotalSource is a professional employer organization (PEO) that provides strategic HR outsourcing. It includes services and technology to manage employee benefits, payroll, compliance, risk management, safety, and recruiting. Users have access to an online portal for things like…

Papaya Global

Papaya Global aims to revolutionize payroll and workforce management with its cloud-based SaaS platform. The vendor offers complete payroll solutions, workforce management from on-boarding to benefits, end-to-end EOR service in over 100 countries, contract worker management, and…

Globalization Partners

Globalization Partners headquartered in Boston offers GoGlobal, a technology platform that designed to present a secure, easy-to-use interface to review personnel information, documents, and payroll transactions. GoGlobal is designed with security in mind, allowing the administrator…

Velocity Global

Velocity Global is a global employment solutions provider headquartered in Denver that helps companies expand overseas with technology and consulting services, specializing in global payroll and foreign subsidiary as a service (FSaaS).

Acvian Payroll Cost Estimator

Acvian Payroll Cost Estimator is a tool for the HR, recruiting, PEO/EOR industry that provides users receive an instant employment cost estimate in one of 118 countries of interest. The tool is designed to liberate companies from awaiting requests and official sales proposals from…

Oasis, a Paychex company

Oasis, a Paychex company (acquired December 2018) provides workforce solutions for employment-related functions including Human Resources Services, Employee Benefits, Payroll Administration, and Risk Management. The vendor states that partnering with Oasis, allows organizations to…

Oyster ®

Oyster is a distributed talent management platform that aims to revolutionize the way companies access the global talent market. Oyster's goal is to make it easy for a company to hire any person, no matter where either is located in the world. Their software platform is created…

Express Global Employment, by Acumen International

Acumen International is a Global Employer of Record (EOR)/PEO service provider. The service helps large companies and SMEs to hire global workforce and get an expedited, ‘express’ global footprint all over the world without the need to register their own business entities. Acumen…

Frequently Asked Questions

Who uses a PEO?

PEOs are mostly used by smaller companies with less than 500 employees, and often less than 100. PEOs tend to be industry-agnostic.

How does a PEO work?

A PEO serves as an employer of record for many smaller businesses, using economies of scale to deliver better HR expertise and benefits than a small business could afford on its own.

What are the benefits of using a PEO?

PEOs allow smaller companies to offer more competitive benefits and access more HR knowledge and expertise than they could afford by themselves. They also reduce in-house HR costs.

What’s the difference between a PEO and an HR management system?

An HR management system just provides the software platform for an in-house HR team to manage and administer. In contrast, a PEO outsources many of those HR processes entirely.

How much does using a PEO cost?

PEOs usually offer two pricing models. Flat per-employee pricing usually ranges from $900-1,500/employee/year. Pricing by gross payroll usually ranges from 3%-15%.