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The Best PEO Service Providers of 2022

Matt D'Angelo
, Contributing Writer
| Updated
Jul 21, 2022

Professional employer organization services can simplify your human resource responsibilities. Learn about the best PEOs available for your small business.
Best for Startups
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Intuitive platform and mobile app
Team of expert consultants on hand
Accreditation: ESAC, IRS and BBB
Best Technology Platform
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Simple platform
Exemplary benefits
Accreditation: ESAC and IRS
Best Resources for SMBs
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Extensive training resources
Multiple plan options
Accreditation: ESAC, IRS and BBB
Best PEO With Tailored Plans
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Custom, industry-specific plans
Flexible pricing options
Accreditation: ESAC and IRS
Best International PEO
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Operates in 140+ countries
Real-time analytics
Accreditation: None
Professional employer organization services can simplify your human resource responsibilities. Learn about the best PEOs available for your small business.

A professional employer organization (PEO) provides human resources outsourcing, benefits administration, payroll support, and more to small and midsize businesses. PEOs differ from HR outsourcing companies because of the co-employment model: The PEO absorbs your employees legally so it can leverage large numbers in benefits markets to obtain competitive pricing. The best PEOs provide all of the HR-related services you need, including guidance that a small business without a full-time HR team needs while ensuring employees can get their HR-related questions answered.

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.

Compare Our Best Picks

PEO service provider Best for Accreditation Contract required Minimum no. of employees supported Pricing structure Customer support
Paychex Startups ESAC, IRS, BBB Annual 5 Per employee A payroll account manager and human resource generalist
Justworks Technology platform ESAC, IRS Month to month or annual 1 Per employee Account manager, live chat, phone and email
TriNet Tailored plans ESAC, IRS Varies based on customer's needs 5 Per employee Varies based on customer's needs
ADP TotalSource Customer service ESAC, IRS, BBB None 5 Per employee A dedicated team of experts and a payroll specialist
Insperity SMB resources ESAC, IRS, BBB Annual or multiple years 5 Per employee An HR manager, a client liaison and safety consultant, and specialists for HR, payroll, performance, benefits and recruiting
Rippling Scalability None Month to month or annual 5 Per employee Live chat, phone, email
Papaya International International None Month to month or annual 1 Per employee Live chat, phone, email

Our Reviews

Paychex PEO: Best PEO for Startups

Paychex has a cloud-based platform and a mobile app, both of which are easy to use.
Customers can access free demos for applicant tracking, time and attendance, performance management, and employee onboarding solutions.
Paychex requires new users to have at least five employees and sign a one-year contract.
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Paychex is an ideal PEO solution for startups. Paychex supports businesses of any size, though you must have a minimum of five employees. This ability to support small organizations makes Paychex ideal for new and emerging businesses. While other PEOs on our list have a lower minimum employee requirement, Paychex excels as one of the best PEOs we reviewed.

Paychex is a national company that offers customizable plans and flexible pricing; it supports a wide range of business types and sizes, including smaller companies looking to grow. Businesses that partner with Paychex can receive HR administration, payroll processing, employee benefits information and risk-management support. And as your business changes, you can add or remove services accordingly. For these reasons, Paychex is the best PEO for startups.

Additionally, Paychex can help you attract top employees and onboard them once they join your company. These are both critical tasks for startups that are trying to grow their talent base.

What contributes to Paychex's appeal is that it features an easy-to-use cloud-hosted platform so you can tap into your services from wherever you are located. In addition, the mobile app ensures employees have access to their payroll and benefits information both at and outside the office.

Paychex provides exemplary customer service, with dedicated support agents to help you implement your new services. It's one of the few companies we reviewed that's accredited by both of the major PEO accreditation agencies: The Employer Services Assurance Corporation (ESAC) and the Internal Revenue Service (IRS). Paychex is also an accredited member of the Better Business Bureau (BBB).

Read Paychex PEO Review

Justworks PEO: PEO With the Best Technology Platform

Justworks' cloud-hosted platform is simple to access and navigate.
It is one of the few PEOs that lists pricing on its website, which makes it easy to know whether their services fit within your budget.
Justworks does not offer industry-specific plans.
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With Justworks, entrepreneurs and their teams can gain access to comprehensive benefit offerings, automated payroll, compliance support, and valuable HR tools – all in one place. As a PEO, Justworks gives small and midsize businesses access to corporate-level benefits at affordable rates, including medical, dental, and vision insurance, and employee retirement plans. Its automated payroll services handle all benefits and tax withholdings.

Justworks, which offers 24/7 expert customer support by phone, email, chat, Slack or SMS, helps streamline your back-office functions in one easy-to-use platform. It recently launched an enhanced version of its live chat tolls, which helps users find answers to their questions faster. The new help tool is available 24/7, and it works by having users simply state what topic they need help on. The tool then quickly provides relevant help content. You get access to HR consultants who can provide tailored guidance and best practices around building workplace policies and managing your people.

What separates Justworks from other PEOs we reviewed is its intuitive cloud-based platform. This company provides designated support agents to help your team learn and use the new system. The platform, which can also be used on mobile devices, is straightforward, so there isn't a steep learning curve. Justworks also offers Guidepost, a new online platform that helps employees plan for their futures and use their benefits to their full potential. The free platform is easy to use and includes a library of short courses and informative lessons.

Justworks is one of the few companies we reviewed that's upfront about its pricing and contract information. This can allow you to compare PEOs easily without getting involved in the company's sales process.

Read Justworks PEO Review

Insperity PEO Services: PEO With the Best Resources for SMBs

Insperity offers training and development materials, including thousands of online books and courses.
Its platform lets you modify information like time and attendance, time-off requests, compensation, 401(k) contributions, and HSA and FSA accounts.
Insperity requires businesses to have at least five employees.
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Insperity's HR outsourcing services, risk management, payroll administration and employee benefit plans make it a great option for small business owners.

A standout feature from Insperity is its employee training solutions. Insperity partners have access to thousands of online courses for HR topics and other educational materials. You can also set up on-site or online training sessions tailored to your business's needs. Overall, Insperity offers more than 5,000 training materials. For these reasons, Insperity is our pick as the PEO that offers small businesses the best and most widespread access to business resources.

While Insperity provides extensive services, it doesn't sacrifice personalized support. Businesses that partner with Insperity receive access to a dedicated support team, including an HR manager, client liaison, HR specialist, payroll specialist, performance specialist, benefits specialist, recruiting specialist and safety consultant.

Employees can easily log into the Insperity cloud-based portal to clock in and out, check how much PTO they have accrued, request time off and review their pay stubs.

Insperity is one of the few PEOs we reviewed that is accredited by all three major accreditation agencies: ESAC, the IRS and the BBB.

Read Insperity PEO Services Review

TriNet PEO Services: Best PEO With Tailored Plans

TriNet is ideal for companies looking for industry-specific services and support.
It offers several valuable online resources, including its Connect 360 services, which put you in touch with HR professionals, who can answer your specific questions.
To use TriNet's services, you must have at least five employees on staff.
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TriNet has an attractive offering for very small businesses, which includes a flexible pricing structure and no long-term contracts. TriNet provides HR services, risk management, document management, payroll software and benefits administration, which are all included in its PEO services. Since the platform has recently been enhanced, users can easily navigate between these tasks with little effort. TriNet offers custom dashboards with pre-built KPIs and visualizations, so you can gain insight into the HR trends that matter to your business. It is also platform responsive, making it easy to access across various devices.

Businesses can also take advantage of TriNet's services to create more inclusive and equitable environments. This includes employee compensation benchmarking, multicompany reporting access, and the ability to select pronouns and gender identity within the platform.

Very small businesses can use TriNet's services to offer competitive employee benefits and HR solutions to prospective employees. TriNet also offers industry-specific plans, so your business can receive specialized attention based on the business environment you're competing in. TriNet's recent acquisition of Zenefits, a people operations platform built for SMBs, gives businesses the ability to tap into an expanded HR offering beyond a PEO.

A valuable aspect of TriNet is its helpful resource offering, Connect 360. With this service, businesses can have their HR questions answered by specialized HR support professionals. TriNet clients can contact an HR rep at Connect 360 by phone, email and live chat from 6 a.m. to midnight ET.

TriNet is certified by the IRS and accredited by ESAC, which is an independent nonprofit that is the official accreditation and financial assurance organization for the PEO industry.

Read TriNet PEO Services Review

Papaya Global: Best International PEO

Papaya Global can support businesses in more than 140 countries.
It provides local currency paychecks, ensuring employees are properly paid, wherever they are located.
Papaya Global is more expensive compared to some domestic PEOs we reviewed.
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Papaya Global provides international businesses with PEO support and compliance. This is essential for small businesses with employees and teams spanning multiple countries. Of all the PEOs we reviewed, Papaya was one of the only one to offer international PEO support.

What makes Papaya stand out is its ability to service employees across different locales. It's one thing to support employees who are all located in one specific country, but if your workforce is dispersed across multiple international locations, there are several factors you have to take into account, including making sure they are all paid properly, their benefits are administered correctly, etc. Papaya can handle all of this and more.

For example, expense management can be another major hurdle for international organizations, but Papaya Global simplifies the process by integrating with Mesh Payments. This partnership reduces the need for employees to front company expenses for reimbursement, and instead allows for streamlined spend management such as policy and limit implementation, automatic receipt collection, payment approvals, and real-time payment reports.

Papaya supports pay exchanges so workers earn paychecks in their own currency, and it provides talent acquisition and employee onboarding services. The company supports all employee types, including full-time, part-time and contract-based workers.

Papaya is available in more than 140 countries. The breadth of its services and reach of its presence throughout the world make Papaya Global an ideal partner for international small businesses. Because of Papaya Global's flexible service offering across multiple countries, it is our best pick as the best PEO for international businesses.


ADP TotalSource: PEO With the Best Customer Service

ADP is a national company that has major bargaining power with healthcare companies.
It has intuitive and simple dashboards, where you can view and modify your benefits.
ADP does not list its pricing online, so you must contact a representative for a quote.
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ADP TotalSource represents more than half a million employees across the U.S. It offers extensive services that are ideal for businesses of all sizes. What sets TotalSource apart from other PEOs we reviewed is the customer support it provides. Each business is assigned an HR expert who can help you navigate often tricky HR issues. In addition, there are payroll advisors, benefits specialists, workplace safety consultants, workers' compensation claims specialists and technology specialists. Employees have their own dedicated support team they can reach out to. With ADP TotalSource, you are able to tap into a complete team of expert support personnel who can guide you through the different issues your business may face.

We got a firsthand taste of ADP's expertise in our interactions with the company. We contacted ADP posing as a small business owner who was shopping for a PEO. ADP was one of the few companies that extended a service brochure to us. When we explained that we were looking at competitors as well, ADP representatives offered advice on what questions to ask and what services to look for in our search. This level of attention was unmatched by other sales teams we contacted.

While the company's customer service is a highlight, make no mistake: ADP TotalSource also provides some of the best PEO services of any company we reviewed. It offers all of the services you are likely looking for in a PEO, including new-hire onboarding, benefits administration, employee retirement plans, work-life assistance programs and full-service payroll. It also offers Roll, an AI-backed payroll app that lets users run payroll by simply saying, "run my payroll." The service also handles payroll taxes, provides payroll notifications and includes live, in-app chat support.

Because of ADP's size and level of personalized attention, it's one of the few PEOs on our list that can grow with your company. TotalSource's friendly and helpful support team, in addition to its comprehensive PEO services, is why we selected it as the best PEO for customer service.


Rippling PEO Services: Best Scalable PEO

Rippling's cloud-hosted platform can serve businesses that have both in-office and remote employees.
Rippling provides local tax-compliance services, which is beneficial to businesses with employees located in multiple states.
Rippling is not accredited by ESAC or the BBB.
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As a growing small business, it can be difficult to pick solutions that can scale to meet your needs. Rippling is one of the most scalable and intuitive platforms of any PEO we reviewed.

One of the advantages of Rippling is the support it provides for decentralized companies. Businesses are growing at a different rate today compared to a year ago. More small businesses are employing people from a wide range of cities and states, which creates challenges from an organization and technical standpoint. These employees often need varying access to specific SaaS features, and Rippling allows you to customize that. For example, you can configure employee access to the applicable PTO system based on their region.

In the age of remote work, small businesses need solutions that can support workers in multiple states. Rippling excels as a scalable platform for new and growing businesses, providing local tax registration and remote laptop management. Additionally, Rippling now offers inventory management tools, allowing you to streamline how you track and manage company devices as you hire and fire employees. This can be especially helpful for remote and hybrid teams as they scale.

Rippling provides great scalable services, like benefits administration, 401(k) retirement plans, commuter tax benefits, pay-as-you-go workers' compensation programs and extensive risk-management services. It even has "no-code" integration capabilities, allowing businesses to integrate Rippling with third-party applications and set up custom triggers between platforms. For example, with its Carta integration, employers and employees can seamlessly get a 360-degree view of their overall compensation in real time. This is ideal for tracking employee pay and growth as companies scale.

With a per-employee rate and no hidden fees, this PEO is our best pick for the best scalable platform for small businesses.

Read Rippling PEO Services Review

How PEOs Price Their Services

PEOs offer two main pricing structures for small and midsize businesses: They charge a per-employee fee (roughly $40-$160 per month) or a percentage of your total monthly payroll (roughly 3%-12%). There are advantages and disadvantages to both types of pricing. The best pricing model for your business depends on factors like your business type, the number of employees you have and the PEO services you want.

Professional employer organizations typically do not offer free trials of their HR services, and contract lengths and structures vary by company. Some PEOs only offer long-term contracts, while others don't require a contract at all. Cancellation policies vary, but business owners typically need to provide at least 30 to 60 days' notice before canceling a PEO service. Some companies allow you to leave at any time for any reason; others charge you a fee for leaving.

Within each of our reviews, we've listed the PEO's cancellation policy. It's critical, though, that you ask about the PEO's cancellation policy before you reach an agreement – you want the freedom and flexibility to cancel the service if you need to.

Below are other crucial items to address with the PEO service you're considering. You should go over this information – even though it may be available on the company's website – with a member of the PEO's sales team to gain a complete understanding of the PEO's services.

Plan Structure

One thing to pay attention to is how a PEO packages its services, like employee onboarding and development, insurance policies, workers' compensation claims, payroll processing, risk and compliance management, and HR tasks. Some PEOs offer a one-size-fits-all solution, whereas others offer customizable services that you can add or remove to fit your small business's needs. There are advantages and disadvantages to both. A bundled solution means you can grow into all the features without changing the pay structure, while an a la carte option is more tailored to your business and can save you money if you only need a few features, such as payroll and health insurance.

Additional Fees

Inquire upfront about additional fees. For example, some companies charge a fee if you cancel service. Thoroughly review the materials the sales team gives you to spot any fees associated with service. If you're not sure, ask the sales representative. Also keep in mind that the pricing model, whether it charges per employee or as a percentage of income, does not include additional costs for healthcare and other employee benefits.

Employee Minimums

Many of the PEOs we evaluated have an employee minimum – that is, they require small businesses to have over a certain number of employees, usually five, to qualify for their service. (Another type of minimum you may see is a minimum monthly salary if your business is below a certain employee threshold.)

If you don't qualify, many companies offer administrative services organization (ASO) or HR outsourcing services. While these services may be similar to the PEO model, they do not have co-employment agreements.

Make sure you understand what your PEO expects from you. You don't want to have to cancel your services or pay an additional fee for falling below the PEO's employee minimum.

Buying Guide

What Is a Professional Employer Organization (PEO)?

A PEO is a company that can take care of HR responsibilities, primarily for small and midsize companies. PEOs have drawbacks, but can manage HR functions, like employee training and development, risk and compliance, workers' compensation, payroll, and benefits, with some offering these services bundled in a preset package, and some offering customizable plans with a la carte features.

PEOs differ from typical HR outsourcing services by operating under a co-employment model, meaning your employees appear on the PEO's "books" for legal and tax purposes. This allows PEOs to act as massive corporations with hundreds of thousands of employees. PEOs can negotiate contracts with employee benefits providers for more favorable rates on unemployment and workers' compensation insurance. It also gives them the power and scope to build and leverage powerful time-tracking and payroll technology for small businesses.

When you sign on with a PEO, you'll work closely with customer success managers (and other team members) to build the services you need for your small business. As your business grows, your PEO can adjust to meet your needs. Working with a PEO under the co-employment model is essentially partnering with a team of specialists to build out the administrative and back-end processes of your organization. If it makes sense for your business financially, these organizations can take out a lot of the stress (and handle most of the legwork) of running your business so you can focus on more pressing needs.

Roughly 175,000 small and midsize businesses partner with PEOs to get high-quality benefits and proper HR support to help their businesses run smoothly. A PEO must adhere to both state and federal regulations, so some companies are divided up by region or even state.

Did you know?Did you know? There are more than 900 PEO providers serving and operating in all 50 states.

As you search for a PEO, keep your state and region in mind – some PEOs are only qualified to serve small businesses in some states, whereas others have global partnerships. Most of the companies we reviewed are qualified to offer coverage in all 50 states. If you're curious about whether a certain PEO operates in your state or not, you can look it up in the National Association of Professional Employer Organizations' directory.

Professional Employer Organization Features

PEOs provide several beneficial resources for small businesses. Since they focus on HR tasks and administration, you are left with more time to focus on your business. On top of that, PEOs can offer better benefits to your employees than you might be able to obtain on your own. This can help you attract and retain top talent. Many employer organizations use mobile applications and online portals for small businesses and employees to easily access important information, like payroll, benefits, and training courses.

Although not every business will need every PEO feature available, here are some of the top PEO features that could help your business.

HR Services

One advantage of partnering with a PEO is having a professional organization take care of all your human resource services. PEOs can create your employee handbooks and policies, onboard new hires, cover HR administrative tasks, offer unemployment assistance, and help you with compliance reporting and employee termination. They often have online reporting tools, employee self-service and advanced HR technology.

Employee Benefits

Since PEOs co-employ multiple businesses' employees, they can offer better employee benefits than you might otherwise be able to offer. PEOs typically offer insurance plans like medical (such as PPO, POS, EPO, HNO and ACO plans), dental, vision, life, and long- and short-term disability insurance. Some offer additional plans like flexible spending accounts, health savings accounts and health reimbursement arrangements.

Employees often receive retirement plans, such as 401(k) and Roth IRA plans, as well as additional benefits like commuter and parking discounts, home and auto insurance discounts, and an employee assistance program (EAP). Many employers receive Affordable Care Act guidance and compliance, while their employees get access to consulting services by licensed benefits professionals. The benefits vary by PEO, as does the cost.


PEOs offer small businesses an affordable way to package all of their HR responsibilities together, including payroll and taxes. PEOs can process your employee payroll with CPAs, prepare and distribute payroll checks, employ direct deposit, and process employee liens and garnishments. PEOs take care of your employees' paid time off, track their sick and vacation time, and prepare and distribute their W-2s.

Many PEOs offer quarterly and year-end state and federal deposits and filings, along with detailed management reports. The PEO you partner with should be able to take care of all your employee payroll needs. By including this cost into the PEO's total, you can ultimately save money on your payroll being handled by financial professionals.

Bottom LineBottom Line: A PEO allows you to operate your business with the peace of mind that your employees are being paid properly and on time.

Risk and Compliance

Managing risk and legal compliance is an important part of running a small business. However, if you work with a PEO, it can manage much of that for you. Depending on your business's industry, this could be a great deal of work handled by someone else. The level of compliance and risk that a PEO manages varies, but many PEOs perform tasks like managing ACA coordination and compliance, running on-site safety inspections, performing accident investigations and job hazard analyses, allocating workers' compensation coverage, and maintaining OSHA compliance for your business.

A PEO ensures your business takes the appropriate measures to maintain workplace safety. Some PEOs provide employment practices liability insurance coverage, safety and loss prevention programs, Health Insurance Portability and Accountability Act (HIPAA) compliance, and Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance. There are several other compliance measures that PEOs can take to keep your employees safe and ensure that your business abides by legal employment guidelines. This alone is reason enough for some businesses to partner with a PEO.

Training and Development

A benefit that some PEOs offer is employee training and development. Many offer online and on-site training courses that your employees can take to enhance their skills. They can access courses on communication, sexual harassment and discrimination, hiring and firing, disciplinary actions, leadership, social media, workplace technology, and even industry-specific training.

Not all PEOs offer continuing education courses, and the courses that are offered vary by company. However, at the very least, most PEOs can train your staff on necessary workplace concepts like avoiding sexual harassment and discrimination.

Customer Service

Make sure the PEO you partner with assigns you a designated team of experts who can handle your HR, risk management, benefits and payroll needs. You want to partner with a company that provides specialists in each area, as well as a relationship manager who can help you take advantage of all the services the PEO offers. Sometimes, the HR consultant doubles as a relationship manager, which is also a good option. The best companies have HR consultants who are certified by the Society for Human Resource Management. SHRM certification ensures that your account coordinator is more than just a company relationship manager.

How to Choose a PEO

Choosing a PEO isn't a difficult process, but it's important to prioritize certain things when looking for the right company. As a general rule, it's a good idea to get as much information gathered about the company before you contact them. That way, you can have a good understanding of the services they offer, as well as the pricing and contract structures before heading into the sales process.

Working with accredited agencies is always a good option, but accreditations are not the be-all and end-all of the PEO world. A few companies on our list that aren't accredited are reputable. Below is a three-step guide on choosing a PEO that can seamlessly integrate with your company.

1. Define Your Business's Needs.

The first step to any buying decision is understanding exactly what it is your company needs from a PEO. Are you looking for health benefits? COBRA administration? A seamless cloud-based platform to keep HR information organized? It's also important to partner with an organization that can support your growth. That is one of the major advantages of working with a PEO: It can help your organization grow from an administrative perspective.

TipTip: As your company changes and more people are brought on board, you want to work with a PEO that can meet your changing needs.

2. Make a Shortlist of Potential Companies.

Our reviews are a great resource. Learn about the services the PEOs that we selected offer, their customer service and the implementation process. Any of our best picks would be a good option for your business. It's your job to match your needs to the right company out there. This is especially true when it comes to pricing and contract structure. Focus on the size of your organization, your growth plans, and whether a specific type of PEO structure would be better for your business.

Once you've narrowed your options to two or three, you can start the next step in the process.

3. Contact PEOs, and Make Your Decision.

Contact the sales team of PEOs you're interested in so you can get a specific picture of what your business partnership will look like. Ask about additional fees, estimated costs and other features that the PEO offers. The sales process should be smooth and simple. If you have trouble, it could be an early indication of a partnership you don't want to pursue. Decide on the PEO that fits your business's needs most closely, and work with a company that you can grow with for a long time as your business reaches the next level.

Professional Employer Organization FAQs

How can PEO services help you attract great employees to your business?

When small businesses offer competitive benefits to potential employees, they are in a better position to attract and retain top talent; this is where PEOs come in. A PEO allows you to offer your employees affordable health benefits with reputable health insurance companies, and additional benefits, like supplemental insurance plans (e.g., FSA, HSA and HRA), employee perks (e.g., home and auto insurance discounts, parking and commuting benefits), and retirement savings accounts like 401(k) and Roth IRA plans.

Additionally, a PEO can help you maintain risk and legal compliance. This can reduce legal problems for your business, helping you earn a positive reputation in your community and reducing employee turnover. Since many employees seek an employer that can offer continued education, partnering with a PEO that offers training and development courses can entice top talent as well.

What is the difference between a PEO and a staffing company?

Although they seem similar, PEOs and staffing companies serve different HR needs. The primary benefit of a PEO is that it handles tedious and time-consuming HR tasks, like administrative work, payroll, employee benefits, risk and compliance, and employee training and development.

A staffing company, on the other hand, primarily serves short-term or temporary employment needs. Staffing companies handle other HR-related tasks, like payroll and unemployment taxes, but often with much higher fees for these services. Small businesses should only consider partnering with a staffing company if they need temporary staffing.

What is the difference between hiring a PEO and an HR outsourcing (HRO) company?

A PEO is an affordable HR option for many small businesses, as it can handle all your HR functions under a co-employment model. A PEO removes the burden of many HR tasks and gives small businesses peace of knowing that critical functions like risk and compliance are being managed by HR experts.

HRO services can handle many of the same HR functions as a PEO, but they operate as a separate entity instead of through an employer partnership. Businesses that use an HRO can choose the HR functions they need to outsource, whether that be just payroll and employee benefits or a full-service HR suite. HR outsourcing is better for larger companies that only need assistance with specific HR tasks.

What is the difference between a PEO and an ASO?

A PEO and an administrative services organization (ASO) both provide human resources services, with one major difference: the employment relationship. PEOs use a co-employment model (meaning the PEO is the "employer of record" for employees); under an ASO partnership, the ASO offers assistance with HR services while the employees remain under the ownership of your organization.

Another difference between PEOs and ASOs is the specific services they offer. Both PEOs and ASOs offer HR services, but ASOs do not provide workers' compensation insurance or employee benefits programs like a PEO does. ASOs are also more flexible in terms of the HR services you can outsource, whereas PEOs typically bundle services.

What do the best PEO services have in common?

The best PEO service providers satisfy your human resources needs, whether those needs are HR administration, employee benefits, payroll, workers' comp, risk and compliance management, or training and development. They use the latest technology so that businesses and employees can easily access their information. Great providers offer HR expertise and customized, one-on-one assistance to help you navigate your PEO services, regardless of how long you've worked with them. The best professional employer organization services are transparent, easy to communicate with, and they are accredited by ESAC and the IRS.

What are the disadvantages of using a PEO?

When you partner with a PEO, that company is technically a co-employer of your staff. This can cost you some internal control over your team and processes, possibly having an outside influence on your company culture. Having an outside company manage your payroll and taxes might make you feel a lack of security as well. For these reasons, it is important to partner with a PEO that you trust and believe in. The right PEO can be a great asset to your company.

How long does it take to get started once I choose a PEO?

Transitioning your HR processes over to a PEO is a big undertaking, but it can ultimately simplify your HR responsibilities. The average PEO transition takes roughly four weeks, starting at the beginning of a payroll cycle, but it could take anywhere from three to six weeks. During this time, the PEO will work closely with your team to ensure all the proper paperwork is complete and successfully transitioned.

What is the advantage of using a PEO for recruiting?

One advantage of using a PEO is the ability to recruit top candidates. PEOs typically offer small businesses access to comprehensive employee benefits that they otherwise might not be able to afford, and these benefits can greatly impact the quality of employees they can hire and retain.

Additionally, PEOs employ experienced HR professionals who can help small businesses implement recruiting and hiring best practices. They understand the current employment laws and regulations that apply to recruiting, so they can help small businesses stay compliant.

What to Expect in 2022

The needs of employees have changed drastically over the past few years, which means employers must seek to partner with PEOs that are evolving to meet those needs. Since the PEO market is projected to grow exponentially over the next five years, employers can feel confident that top PEOs on the market are doing just that. Employers should expect to see advanced tools, such as employee self-service capabilities, enhanced employee benefits (and administration) and legal compliance assistance to become staples in PEO offerings.   

As many employees settle into remote and hybrid work environments for the long haul, they need software to be accessible from in and outside the office. PEOs offer extensive cloud-based technology platforms that make it simple and easy for everyone to use from any location and device. This is essential for companies with varying types of workers, especially when it comes to ensuring that sensitive HR-related information is properly secured. 

The types of benefits employees prioritize have also shifted in recent years, which means PEOs must modify their benefit offerings and administration to stay competitive. Past employee benefits, like company lunches or other employee perk programs, may no longer be possible or practical for many organizations. Instead, employees are prioritizing benefits like flextime, sick leave, affordable health insurance, and professional learning and development opportunities. PEOs are continually evolving so that employees can easily get and manage the benefits they want.

By working with a PEO that's up to date with technology, you can better track flexible work hours and provide remote workers with a standardized, simple HR, payroll, and benefits solution. This can go a long way for smaller companies looking to combat burnout among managers and employees alike, as many prior processes can be automated, especially from an HR perspective.

Although legal compliance has always been important, the pandemic has created an even more significant need for this. As PEOs navigate employment and labor laws, they must work closely with small businesses to ensure the owners are maintaining a safe and compliant workplace.

Matt D'Angelo Contributing Writer
I've worked for newspapers, magazines and various online platforms as both a writer and copy editor. Currently, I am a freelance writer living in NYC. I cover various small business topics, including technology, financing and marketing on and Business News Daily.
Image Credit: fizkes / Getty Images
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