What is a PEO? How does it boost your business?
What is a PEO? How does it boost your business?

What is a PEO? How does it boost your business?

What is a PEO? How does it boost your business?


One of the best ways to take administrative burdens off your shoulders is by availing the services of a PEO.

What is a PEO? How does it boost your business?

Consider this. You’re an entrepreneur running a successful business in your part of the world. For years together. You’re at a point when offshore expansion might drive more business for your company.

You see immense opportunities in a specific country or region. You can’t wait to tap its hidden potential.

But wait. You are forced to undergo an exhaustive cycle - talent hunt, recruitment, workforce management, administrative issues, etc. 


Would you invest your time and resources into these? Or would you focus on more pressing business needs? 


The latter, of course. So what do you do? How do you handle immediate administrative and human resource needs? Through PEO services, of course. 


  1. What is a PEO?


Professional Employer Organization (PEO) helps you with employee management and administrative services at a remote location. 


It handles critical functions like 


  • Recruitment and onboarding
  • Payroll management
  • Employers’ tax filing
  • Unemployment insurance filing
  • Health, wellness, and related benefits (healthcare plans, retirement benefits, mental health support) 


PEO takes the load off you for more time-consuming HR activities. So you can focus on what matters most - growing your business. 


It’s evident why businesses have been eyeing PEO services over the years. 


  1. PEO market watch 

What does the market structure look like? 

The Professional Employers Organization market stood at around USD 52.44 billion in 2020, and is expected to go up to USD 106.21 billion by 2028. The CAGR during the period (2021 to 2028) is 10.61%.


Global PEO Market Segment Analysis

Source: Verified Market Research 


  1. Benefits of using a PEO


Partnering with a PEO has many advantages. 


As we explained earlier, PEOs save you the hassle of setting up your business in a foreign country. You save on time and money, and the hardships of getting Government approvals. How else does a PEO help our business?


  • By increasing efficiency
    The need for sophisticated and streamlined HR services drives the demand for PEOs. A dedicated team of professionals is there to help you run your business efficiently. 

Business owners don’t need to juggle multiple roles - get immersed in paperwork, and focus less on business strategies. 


Outsourcing tedious functions to a PEO saves time. A survey by NAPEO suggests that by partnering with PEOs, small businesses grow 7 to 9% faster. They have 10 to 14% lesser employee turnover, and are 50% less likely to go out of business.


  • Through reducing risks
    PEOs employ qualified professionals to follow employer-specific state and federal laws. This helps them stay up-to-date on the constantly changing laws, regulations, and other reporting requirements that can affect your business in a remote region.


So, partnering with a PEO agency mitigates risks associated with 

  • Accurately reporting, collecting, and depositing taxes
  • Manage and maintain employee-related claims as laid out by the Governments.
  • EEO reporting and related claims
  • By cost optimization

Opting for PEO services hugely cuts down on the cost of employment for any business. But how?

  • Following better hiring practices that minimize employee turnover.
  • Motivating your employees in newer ways.
  • Strategizing future moves.
  • Handling crisis

In times of crisis, like political or financial instabilities, or the recent pandemic that hit our planet, PEOs would ensure that your business remains unaffected. Having extensive experience of working in a particular region, they have just the experience and expertise to predict future trends - precisely the reason why foreign investors find them more dependable.

  1. Common misconceptions about PEO

Entrepreneurs often fear that partnering with PEOs would mean losing control over employees. As daunting as the process might seem, rest assured that PEOs never replace ownership, nor do they interfere with the internal functions of a company.


They have the knowledge and experience to sail you smoothly by setting up a remote site.

  1. How much does a PEO charge?
    What a PEO services firm charges would depend on several factors like the size of your organization, the types of services you wish to avail of, and the pricing structure of the PEO.

PEOs usually follow one of the following structures:

  • Fixed monthly rates that are charged on a per-employee basis.
  • A variable structure as a percentage of payroll.


As transparent as they may seem, often hidden costs are involved, like the State Unemployment Taxes. It always works better to clearly understand the contract and the costs involved, before partnering with a PEO.


Make sure that PEO charges suit your budget. Choose an agency that has a transparent pricing structure.


  1. How to choose the best PEO
    No two PEOs are alike. Choose the most suitable one. 


\Agencies serve specific geographic locations, company sizes, and sectors. Make sure to tie up with a PEO that has experience working in your domain and can support you throughout your upward journey. 


Other crucial factors to consider:


  • Has a strong track record and financial stability.
  • Is accredited, registered, or licensed with reputable state or federal bodies - the IRS, the Employer Services Assurance Corporation (ESAC), the Better Business Bureau, the TDLR, or local and state chambers of commerce.
  • Has enough contacts within your industry.
  • Has a vast social media presence. 


If you are planning to set up your business in a remote location, you need to look no further. Easy Source India HR Solutions has been instrumental in helping clients with all-around PEO services (recruitment, payroll management, tax filing, etc.) since the past 15 years. 


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