Exploring the Benefits of PEOs as an HR Solution

Being a CEO or employer of labor is hard work. Every passing day business owners face HR issues that may be too complex to take on your own. As issues pile up, you may be focusing a significant amount of time on HR. Wouldn’t it be nice to have a professional HR provider that will take care of employee-related challenges? Wouldn’t it be a relief knowing that a team of experts is managing your workforce in an efficient manner? This team of experts that can provide these benefits are called Professional Employer Organizations (PEOs).

As a business owner tasked with ensuring that your business grows and scales above the competition. You have to ensure that your employees are working to achieve the organizational objectives, and much more. In this article, we will explore the benefits of PEOs to businesses in a constantly-evolving business world and how they can significantly reduce the HR role from the business owner.

What are PEOs?

PEOs are third-party outsourcing firms that present solutions to your HR, payroll, benefits, and worker’s compliance issues. PEOs play the central role of a professional employer of your workforce. But there’s nothing sinister about that.

As the owner of your business you remain the operating employer of the establishment. This gives you more freedom and control over the decision-making process, PR strategies, brand marketing, and much more.

You’re probably asking questions “How will PEOs benefit my business? Wouldn’t it be safe to just stick with HR software?”. We will discuss all the benefits there is to consult HR problems with a reputable PEO.

Provide Better Benefits

When you outsource your business’ HR to a PEO, your employees will have access to broader benefits than your business would provide at the moment. These benefits are cost-effective and without administrative burdens that can be exhausting.

According to the Affordable Care Act (ACA), if your business has a workforce of about 60 employees, you must provide health insurance. This can be mentally exhausting when you think about how you are going to scale your business to provide these insurances.

That is where PEOs come in. These HR experts will provide great benefits that are cost-effective for your business. Some of these benefits include:

  • Retirement and 401(k) plans. 
  • Life insurance
  • Personal accident insurance 
  • Short-Term Disability
  • Long-Term Disability
  • Health Savings Account (HSA)
  • Health Reimbursement Arrangement (HRA)
  • Flexible Spending Account (FSA). This includes medical and dependent care.
  • 3(21) and 3(38) advisory services.

PEOs Handle Payroll and Taxes Efficiently

Dealing with payroll-processing and related accounting issues in your business is often time-consuming. And there’s the probability that you may not get the calculations right for deductions and taxes. And even if you hire an accountant, will they stay up-to-date with state and federal tax laws?

Working with a PEO can take this burden off your shoulder. PEOs have a better understanding of payroll and will process them while deducting the correct taxes from each employee’s wage.

Also, PEOs also deploy efficiency in handling W-2s, withholding and other garnishments.

They Help Recruit Talented Employees

As an employer, you are often tasked with the responsibility of recruiting capable hands that will help move your business forward. You have to pore too many several resumes, submit job ads, hold countless interviews, among other responsibilities. This not only costs time but money. 

That burden should be handled by a PEO. This team of experts is connected to a recruitment network with several qualified candidates in the position. PEOs will do all the scouting, initial interviews, and select the top and most experienced candidates for your assessment.

You can create a working relationship with a PEO in recruiting the best candidates for your company or business.

PEOs Help Track Employee Performance

Unless you have a background in human resource management, you’re going to struggle with tracking every employee’s performance. Keeping their performance in line with your organizational objectives will also become strained. It is also going to be difficult to give objective and concise feedback.

With PEOs, this problem will be a thing of the past. PEOs provide a tracking software that employee and employer fill out. This performance reporting structure ensures that you and your employees remain on the same page.

Better Retirement Plans

Teaming up with a PEO is beneficial for your employees as they can provide access to retirement plans which includes 401(k). This is a unique option that may inspire employee retention.

PEOs also offer guidance on which retirement options to choose from and offer to your workforce.


The importance of Professional Employee Organizations cannot be downplayed. Your business needs to scale beyond the competition. And you need the best team to make it possible.

CalmHR is just what your business needs. Giving you back the freedom to engage in productive strategies while HR and payroll are being efficiently managed.

Contact CalmHR today.

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Marc Freedman

To help you achieve your company's financial growth goals, Marc serves as our Chief Cost Advisor, providing advice to client management teams. He is highly regarded as an expert in his field, and he frequently collaborates with and contributes to other spend consultants to develop and implement cutting-edge strategies for their respective clients.

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