What is a PEO and how does it work?

A professional employer organization (PEO) is a type of HR outsourcing, and when you choose to partner with a PEO, you enter into a co-employment relationship. Within this structure, the PEO becomes an employer of record for your employees, sharing employment-related responsibilities with you.

Think of it this way: Co-employment creates a shared responsibility model. Your PEO handles administrative HR tasks like payroll and benefits, while you retain full control over day-to-day operations, employee management, and company culture.

You continue to direct your employees’ day-to-day activities, manage all operations, handle all business decisions (including hiring and terminations), and your employees will continue to look to you for direction and leadership. In short, the partnership allows you to leverage the PEO's expertise while maintaining the autonomy you value in running your business.

Why would a company use a PEO?

As an owner or decision-maker in your organization, you understand the importance of optimizing operations to help drive sustainable growth. When you partner with a PEO, like G&A Partners, you’re not just offloading HR tasks, you’re also bringing on the comprehensive support and expertise of an entire HR department – for about the price of one, full-time employee.

And the benefits of using a PEO framework extend far beyond traditional HR outsourcing. By leveraging the expertise and resources of a PEO, your company can:

• Streamline HR processes
• Grow and scale efficiently
• Access affordable, Fortune 500-level employee benefits
• Maintain legal compliance and mitigate compliance risks
• Attract (and retain) the best talent
• And much more

Ultimately, partnering with a PEO gives you the ability to focus on what truly matters: achieving strategic objectives, so your company (and your employees) can reach the next level of success.

In fact, in a 2021 white paper from the National Association of Professional Employer Organizations (NAPEO), one economist’s research showed that companies that partner with a PEO have:

• 40% better revenue growth.
• 14-16% less employee turnover.
• A reduced likelihood (by 50%) of going out of business.

When should a company use a PEO?

No two companies are identical, and neither are their reasons for choosing (or not choosing) to work with a PEO. Knowing when to use a PEO, however, can be a game-changer for your business.

So, how do you know if it’s the right time? The decision of when to use a PEO depends on your company's specific needs and goals. If you’re looking to streamline operations, reduce administrative costs, and improve overall HR efficiencies, a PEO can provide invaluable support.

At G&A Partners, clients seek our help for a variety of reasons, such as:

• You or your staff are overwhelmed by the administrative burdens associated with HR tasks and would like to outsource those functions.
• You’d like to provide better, more competitive benefits, but finding affordable options on the open market feels impossible.
• Attracting and retaining top talent is increasingly challenging and you need help.
• You lack the personnel, expertise, or resources to dedicate a person or team to HR.
• Part of your growth strategy is to acquire other companies, and you want to create a smooth transition for employees from those companies.
• Your company is quickly growing – which is exciting – but it also means you’re spending exponentially more time on HR.
• You’re outsourcing different aspects of HR – payroll, benefits, etc. – but you’d like to consolidate all of those tasks through one provider who can do it all.
• You want to ensure your workplace is safe and inclusive but need expertise to guide you.
• Tracking evolving workplace laws and regulations is time consuming, but you want to ensure you are minimizing risk for your business.

In most cases, PEOs are a great fit and produce maximum value for small to mid-sized companies.

Schedule a consultation with G&A Partners to find out if it’s time for your business to use a PEO.

Why should a company switch PEOs?

If you’re considering switching PEOs, you understand the benefits of a PEO partnership, but perhaps you’re experiencing issues with your current provider. Whether you’re seeking a higher level of client service, more comprehensive expertise, a team who knows your needs and your name, or all of the above, switching to a new PEO partner with a proven track record of delivering on those needs can make all the difference.

At G&A Partners, we provide comprehensive, scalable HR solutions, and we’re focused on helping you and your team grow and succeed. We also make the process of switching PEOs and onboarding as simple and streamlined as possible. In fact, we assign each new client a dedicated onboarding team lead, who will walk you through each step of the onboarding process, answer any questions along the way, and ensure the entire experience—for you and your employees—is a smooth and painless transition.