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How Does Hiring a PEO Benefit My Business in 2022?

Updated: 4 days ago


How Does Hiring a PEO Benefit My Business in 2022?
How Does Hiring a PEO Benefit My Business in 2022?

Are you overwhelmed with managing the HR-related concerns of your small business? Do you find it difficult crossing your “t’s” and dotting your “i’s” when it is tax time? Are you having issues staying compliant with local, state, and federal employment laws and policies? Perhaps, you don’t even have a clue of what compliance issues you’re faced with as an employer?


If your answer to one or more of the questions above is a “yes”, then it might just be time you considered hiring a PEO. For most small and mid-sized businesses, the most pressing reasons why a PEO partnership is beneficial are to gain access to better employee benefits packages and for accurate and timely tax filing.


What a PEO Cannot Do for You


In this post, you’ll learn some of the ways a PEO can help you overcome some of your employee-related challenges. While a PEO can offer you several functionalities that make business easy for you, there are some things that a PEO cannot do for you. For instance, it is still an employer's responsibility to provide job details, measure employee performance, provide a safe and conducive working environment, and determine employee wages/salaries. You can check out these faqs about PEO companies to understand what PEOs are really about.


Ways by Which a PEO Will Benefit Your Business


Here are the major benefits of using a PEO service:


You get full-spectrum professionals HR Service for Less


PEOs offer you access to varying HR functions, covering benefits, health insurance, efficient payroll processing, retirement savings, implementation of compliance policies, etc. Some of the best PEO services even offer you custom or tailored PEO services best suited for your business.


In addition to that, you will actually get these services for less. Partnering with a PEO means you enter into a co-employment relationship that allows you to offload a number of your liabilities. PEO companies offer you an excellent option to cut back on heavy HR administrative functions, including complicated responsibilities, such as compliance and payroll taxes.


Avoid running into compliance issues


Businesses must comply with local and international (where your business operates in foreign countries) HR policies. This way, you avoid heavy fines and sanctions. To keep your business policies and processes compliant with regulations and employment laws, teaming up with a PEO is an excellent solution. These organizations understand what the law says, they are conversant with current trends in the labor market, and how to avoid issues with the authorities. As a small business, you risk being penalized for things like employee salary history inquiry and failure to file payroll taxes as and when due. Working with a certified PEO is often advised as CPEOs are already verified by the IRS. Find out more about CPEO benefits.

Offer better benefits for your employees


Companies that partner with a PEO are able to offer more employee benefits and better compensation to their employees than others that don’t partner with a PEO. Most PEO clients are small businesses that do not have the power or network to provide the best compensation plans, health insurance, and other benefits, such as employee assistance programs (EAP) and 401(k) plans. This is one way PEO companies help your business save money on operational costs.


Increased productivity


By outsourcing your HR services to a PEO, you’ll be able to raise your productivity bar higher and monitor employee performance. The daily productivity of your business will increase.


Some PEOs offer time tracking software that allows you to cut down wasted business hours to make the most of your workforce. This way, it is easier for you to grow your business and meet clients' expectations. And when you need to onboard more employees, you can rest assured that the right talents will be joining your team. PEOs can also help with pre-employment screening and background checks.


Shared liability insurance


Shared liability insurance allows you to absolve your business of some or most of the risks you face in your line of business. Shared liability helps minimize the risk involved in a venture by making more people liable for it. Learn more about shared liability insurance. This means that the PEO you're working with is also liable for any damages or loss you may suffer from employee-related issues.


For instance, PEOs shared liabilities can include handling lawsuits for issues like wrongful termination and providing assistance and expertise to mitigate potentially costly settlements. Typically, your company does not have that kind of strength and may likely lose without the support of a bigger partner.


Retain your employees for the long haul


You can reduce employee turnover when you hire a PEO. Your employees remain your greatest assets. And the best way to retain experts who'd otherwise hop away to the next biggest offer is to keep them satisfied. Job satisfaction is one of the reasons any employee would want to stick around even though there may be higher pay elsewhere.



With a better recruitment process, encouraging compensation plans, healthcare services, and a good working environment, you can save yourself the trouble of always needing to replace an employee who has left. In other words, partnering with a reliable PEO is a way to keep your employees motivated and build a competitive advantage in your industry.


Your business has a higher chance of survival


Most small and medium-sized businesses, including startups, have a 50% higher chance of survival when they partner with a PEO. You get professional business consultation and tailored HR and administrative services that help you navigate most challenges facing SMBs. If you're a startup looking to scale your business, one of the best ways to survive the stiff competition with more prominent brands in your industry is by partnering with an organization that provides you with the best administrative and management service. At the same time, you focus on the growth of your business.


Looking to hire a PEO, but not sure which to pick?


Reach out to us today, The Mission. We are a leading partner in the PEO, HR, payroll, and benefits outsourcing marketplace. At The Mission HR, we can take that concern off you by helping you secure a beneficial partnership with a certified PEO.


We provide result-oriented services for small and medium-sized organizations and government contractors, serving as a trusted partner in integrated human resource compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing.