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What Size Company Should Use A PEO (Professional Employer Organization)?

October 1, 2021

Running a business is never going to be easy, but there are ways you can help to lessen the load on yourself and your team. It is particularly difficult if you are a small team that is trying to do everything.  You might consider either expanding or using services like a PEO to help you out. The size and demand that you have is going to be what determines how beneficial a PEO may be.


What is a PEO?

A PEO or professional employer organization is a third-party service that is put in place to help other businesses handle their employment processes. This can include recruitment, benefit handling, payroll handling and more. Having PEO services for your business can be a great way to improve your business overall, as you will have less on your plate and potentially pay less than you are currently paying for your human resources. Managing employees can be difficult, and you may benefit from the help of another party.

What A PEO Can Do For You

More importantly, it is important that you understand what size company should use a PEO and what PEO services can do for you. There are a lot of benefits to be gained, but not every business is going to benefit the same. If you already have a well-designed system for managing your human resources, you might not gain as much as a business with a heavily strained human resources team. With that said, there are still reasons a business with a strong human resource team might be interested, as listed below.

Lower Cost Of Operating

Trying to handle everything by yourself and within your team can be very difficult. You might find that it is cheaper for you to reach out to a third-party company. Having a third-party handle a chunk of your human resources can save you and your team a lot of time and money. You are going to be entrusting that work to a company with a strong reputation and good connections, which is likely something that you would not be able to do by simply expanding your team.  There is no guarantee that you could build an efficient team quickly enough to be financially beneficial.

Make Your Job Easier

Having the option to shift a lot of your work to a third party means that you are going to have less on your plate. Whether you want the PEO to handle the majority of your human resource processes, or just a few, you and your team will have your hands free to manage other tasks. You can spend this time being more productive, as well as relieving the stress from your team with a lower workload.

Drive Growth

When you reach out for the services of a PEO, you are not only getting the option to have them undertake a lot of work for you, but you may also seek advice that can help you improve your own business. Managing employees is difficult.  An experienced PEO can help to improve the environment for current and future employees. Any business can always benefit from the expertise of another.

Increase Employee Culture

It is important, in any business, that all employees are on the same page regarding your expectations for job performance. When your recruitment is handled by a PEO, you can be assured that the employees hired will be properly informed of what’s expected of them. Recruiting your own employees can be time-consuming and tedious, especially when you are often required to oversee the process. Making sure you get the right employees for your business is important – yet another benefit of a PEO.

Protect Your Company

Recruiting employees can be time-consuming and risky, and tough to deal with when your business is already strained. You can be assured you will receive quality employees without putting any unnecessary time into recruitment.

On top of any risks with employees, you also need to be sure you’re complying with the laws in which your business operates. For some businesses, it’s difficult to work within those bounds consistently and mistakes can be made. When you work with a PEO, you forfeit that risk.


How Big Should Your Business Be?

It is normal to be concerned about what your business does and doesn’t need, but when it comes to PEO services, your business can be any size. Every team needs to be able to work effectively.  Every company wants to have the best benefits available at the best price. Even a 5-member team can benefit from a PEO. You can be sure that everything is handled properly and efficiently, without the need for your own constant input. With your hands freed up to work on other things, you and your team can push forward much faster. 

Having PEO services contributing to your business will become even more beneficial as your company grows. The more people you recruit to work under you, the more time you’re saving when using PEO services.

Using PEO services allows you to mitigate legal risks when it comes to employee management. You gain the benefits of a more experienced team handling the processes of your business. You save money and you avoid mistakes that a less experienced team might face when handling something this important.


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