peo industry overview

The growth of the Professional Employer Organization (PEO) industry or what has also been referred to as HR Outsourcing has been phenomenal. In 1986 there were approximately 100 PEO's in the US administering 50,000 employees. Today there are in excess of 1000 PEO's administering the payroll, human resources, risk management, and health and welfare benefits for in excess of 3 million employees. Projections out of Washington estimate that by the year 2012 there will be in excess of 10 million employees administered by PEO's.

The reason for this growth is simple. Workers compensation and health insurance continue to spiral out of control while the federal and state regulations governing employee administration continues to get more complex with each passing year. Also helping to drive this growth is the fact that many state governments have put in place stringent regulations mandating background checks, audits and other significant controls causing business owners to feel secure that what is promised is being delivered with minimal potential for fraud.

As a businessperson your clients have two choices either try to do it all themselves assuming all the liabilities, or outsource this function to a professional firm whose sole business is human resource administration and liability management.

As a business process outsourcer, The PEO provides a diverse range of human resources products, services and functions including integrated payroll, benefits, and human resource management. The PEO specializes in tailoring a combination of solutions that in concert produce the greatest value to their clients. 

The human resources regulatory compliance arena continues to be a myriad of ever changing state and federal mandates.  The cost of ensuring compliance continues to climb with each new regulation however, in many cases, small and medium sized businesses simply cannot keep up. The PEO provides human resources regulatory compliance services that control costs; systematically address key compliance issues, and provides legal liability protection. The PEO's unique approach develops a human resources regulatory compliance foundation and tailors it to meet your client’s business needs.

The PEO offers a complete payroll outsourcing, tax administration, and reporting service that unburdens your client’s employees of time consuming administrative tasks. The PEO's payroll processing and outsourcing services offers world-class service, and leverages the efficiencies of a dedicated payroll and tax processing system. Your clients assigned highly experienced payroll and benefits professional are always available to give the highest level of personal attention to them. Most PEO's pride themselves on their flexibility and creativity, and welcome any challenges that a customer may present.

The PEO also provides and administers a comprehensive workers compensation program.

They also do everything possible to ensure that your clients have the safest work sites in their respective industries. Although specific laws and regulations vary depending on the state, the overall goals of worker's compensation insurance are generally the same. Worker's compensation laws and regulations require employers to adhere to strict practices covering a broad range of topics, including handling employee claims and properly implementing and posting safety guidelines.  Failure to properly follow worker's compensation guidelines can result in direct penalties, as well as increased premiums, increased civil liability, and can compromise an employer's ability to secure worker's compensation insurance coverage.