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Why PEOs Are Superior to Any Other HR Service Provider

CoAdvantage – Getting help with HR is almost always a smart decision, especially from small-to-midsize businesses who stand to gain from economy-of-scale pricing and service delivery. What’s not so clear is what kind of HR service to choose. Businesses have a wealth of options these days for HR services.

Professional Employment OrganizationsPEOs are an all-inclusive option that can take on as little or as much of the HR function as you like, but generally take the form of a co-employment structure where the PEO assumes liabilities associated with the workforce (like payroll taxes) while the employer retains full management and oversight.
Administrative Service OrganizationsASOs are very similar to PEOs but without the co-employment aspect.
Process OutsourcingHere, companies choose function-specific firms that assume those duties on a contractual, outsourced basis. They usually focus on complex tasks like recruitment.
Online or app-based HRThese services are also usually function-specific and focus on a specific transactional aspect of HR (like payroll or benefits administration).
Individual contractorsSome employers, especially smaller ones, may opt to have one or two contractors come in to just “handle” HR for them on a contractual, sometimes part-time basis.

PEOs stand out among all these options. The proof is in the numbers: research shows that PEO clients generally have lower costs, faster growth, and dramatically lower failure rates than non-PEO clients. But why? What is it that makes PEOs so special?

1: A PEO is unique in that it can get you out of the employer business in a way no other HR vendor can

A PEO is intentionally designed to get employers out of the employer business, so that business owners and executives can focus their energies entirely on core, revenue-generating, business-growing activities. Through a co-employment model, the business itself no longer has to deal with burdensome liabilities like payroll taxes.

2: A PEO can do everything – and do it all well

A PEO can help you avoid the time-consuming tasks that are usually required to support functions like payroll, benefits administration, insurance, retirement programs, risk management, and more. PEOs can go even further than others, however, by also offering dedicated HR experts – many with in-depth knowledge of specific aspects of HR – and help turn the HR function from a cost-center into a value-generator.

3: A PEO can give small and midsize businesses enterprise-like HR power

A PEO facilitates the efficiencies that result from economies of scale. For example, PEOs can provision a huge range of benefit programs that ordinarily would only be accessible to enterprise-scale organizations, and they can do so in a way that’s affordable for smaller organizations. That can turn even small businesses into powerhouse recruiters and turn HR services into engines of business growth.

CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.


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