10 Best PEO Companies Shortlist
Here’s my shortlist of the 10 best professional employer organization (PEO) companies that I’ve covered in detail in this article, out of the 24 options I’ve included in total:
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Are you feeling the burden of corporate expansion? Sure, it's great to grow your business in new markets, but who's going to take care of all your new employees overseas? The best way to get these new responsibilities off your desk so you can get back to your main priorities is to work with a PEO company. A PEO company (a.k.a. a professional employer organization) is a hassle-free way to outsource your HR needs.
Choosing the best PEO company is a matter of finding one that meets all your business needs. In this article, I'll walk you through my picks of the top PEO companies that can help you get your work life back in order.
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The 10 Best PEO Companies: Quick Comparison Chart
This comparison chart summarizes basic details about each of my top PEO company selections. You can view their pricing details side-by-side to help you find the best PEO provider for your budget and business needs.
| Tools | Price | |
|---|---|---|
| Deel | Flat rate user pricing, with free HR tool for businesses | Website |
| Rippling | From $8/month/user | Website |
| Papaya Global | EOR from $650/employee/month or $2/contractor/month; Global payroll from $3 to $12/employee/month | Website |
| Paychex PEO | Pricing upon request | Website |
| Paychex Flex | From $39/month + $5/employee/month | Website |
| ADP TotalSource | Pricing upon request | Website |
| Worksuite | Pricing upon request | Website |
| CloudPay | Pricing upon request | Website |
| Mercans | Pricing upon request | Website |
| Globalization Partners | Pricing upon request | Website |
Compare Software Specs Side by Side
Use our comparison chart to review and evaluate software specs side-by-side.
Compare SoftwareHow to Choose a PEO Company
Partnering with a PEO company can help you outsource your core HR functions so you can focus on more strategic HR operations. To help you figure out which PEO service best fits your needs, you need to document your specific challenges first.
As you work through your own unique selection process, keep the following points in mind:
- What problem are you trying to solve - Start by identifying the challenges you're trying to overcome, whether that's managing HR admin tasks for employees abroad, improving your benefits administration, or monitoring key markets for changes to labor laws and regulations to maintain compliance.
- Who will benefit from the service - Consider who will manage the PEO relationship (i.e., who will your main contact people be in-house?) and how working with a PEO company will improve their day-to-day work tasks.
- What is your budget - To evaluate cost, estimate how many foreign employees your chosen PEO company would serve. Since PEO providers often charge a flat monthly fee based on your employee headcount, this will help you estimate your monthly costs.
- What outcomes are important - Review the capabilities you want to gain or improve, and how you will measure success. For example, you may want to reduce administrative demands on your in-house HR staff or put new HR support structures in place that are scalable to accommodate future growth. You could compare service providers until you’re blue in the face but if you aren’t thinking about the outcomes you want to achieve, you could waste a lot of valuable time.
- How it would work within your organization - Consider how the service provider's software ecosystem would work alongside your existing workflows and systems. Would their software framework integrate with your existing HR software, or would you face data management roadblocks?
Remember every business is different — don’t assume that a PEO company will work for your organization just because it's popular.
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Deel
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.8 -
Paycor
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.1 -
Paychex Flex
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.2
Reviews of the Best PEO Companies
To help you find the best PEO company for your business needs, I’ve described my top 10 selections in detail, including the specific services each provider offers. In addition, I’ve included 14 more PEO providers below if you’d like even more options to consider.
Deel is a professional employer organization platform that enables international hiring by establishing local expertise. Companies can use Deel to rapidly employ people in 150+ countries without ever needing to establish a new entity. They are well-known for their international presence and expertise and are used by many well-known companies including Reddit, Shopify, and Dropbox.
Why I picked Deel: Deel's PEO service and software platform offers end-to-end management of your team, from onboarding to termination. Their web app is user-friendly and offers a range of features to help businesses manage their workers effectively. These include international benefits, contract management, and expense tracking. Their integrated contract management function also supports advanced customizations such as stipends, signing bonuses, and stock options.
Deel's Key PEO Services:
The well-established business has launched several new service offerings over the past year, including global payroll, global mobility support, integrated Slack tools, and advanced integrations. The global payroll offering brings in-house expertise, which can significantly help companies with existing payroll setups to streamline their accounting and reporting procedures.
Deel also offers free calculator tools to help you estimate the cost of an international worker. You can compare different country costs and see what benefits and withholdings are required. Deel also ensures all legal obligations are met on your behalf so you don't have to stress about local compliance requirements either.
Compared to other PEO and EOR offerings, Deel stands out with local country experts who provide consultative approaches for each location you hire from. They are also one of the largest payroll systems we’ve seen here, and report having 100,000+ active worker contracts.
Deel's Pricing:
Deel offers flat-rate user pricing with several different plans to choose from, and a free version for businesses with up to 200 people. You can also request a free demo through their website.
Pros and cons
Pros:
- You can track time-off requests easily via a Slack plugin
- Offers additional employer of record (EOR) services, if needed
- Offers global payroll services across 150+ currencies
Cons:
- No free trial available
- No mobile app available
Rippling
Best PEO option that allows self-managed HR with a click, for USA and Canada-based companies
Rippling PEO runs on modern software and can automate your HR and IT busywork—from automated onboarding to remote IT management. Rippling takes care of critical compliance tasks—like setting up state and local tax accounts and workers’ comp—and provides teams with access to big-company benefits at a lower cost.
Rippling PEO also comes with powerful reporting that can aggregate data to generate actionable insights. Customers can measure headcount changes, track payroll by department, see how candidates are moving through the recruiting pipeline, and more.
When customers decide to bring all of their HR in-house and outgrow the need for a PEO, they can turn off Rippling PEO and immediately transition to Rippling’s all-in-one HR platform with zero business disruption. No other PEO offers a standalone HR platform so if a company outgrows a PEO, they’ll spend months setting up an entirely new HR system—from payroll to integrations. With Rippling, system integrations will remain intact, employees will have the same login, and companies can continue using Rippling in the exact same way.
Rippling integrates with Google Workspace, Typeform, Databricks, BrightHire, Atlassian, Google Workspace, Slack, Checkr, Zoom, GitHub, Asana, 1Password, Zendesk, Dropbox, Sage Intacct, Netsuite, Microsoft 365, QuickBooks, DocuSign, Upwork, LinkedIn, and dozens more.
Pricing details for Rippling PEO are available upon request. They also offer a free demo.
Best PEO company for payroll automation and cross-border payments in 160+ countries
Papaya Global aims to help companies remove barriers to global hiring. Their automated SaaS platform provides an end-to-end global workforce management solution for global PEO needs, covering everything from employee onboarding to cross-border payments in 160+ countries.
Why I picked Papaya Global: Their global PEO and employer of record (EOR) platform simplifies the payroll administration process for paying foreign workers, and it's backed by experts who guarantee 100% payroll compliance and bank-level security for your employee data. It's also used currently by some heavy hitters, including Microsoft, Toyota, Shopify, Canva, Vimeo, and Wix, which adds additional peace of mind.
Papaya Global's Key PEO Services:
Papaya's platform supports all employee options (payroll, EOR, and contractors), and is designed to help any company simplify global people management at scale. Enterprises can access Papaya’s state-of-the-art automation, security, and business intelligence (BI) without replacing their existing payroll system. This platform is managed by a team of designated country experts who are constantly monitoring changes to payroll, financial, legal, regulatory, and compliance changes in the countries they represent.
Papaya's workforce platform integrates with popular management tools and uses smart technology to ensure compliance and eliminate errors. It also creates a highly visible system for tracking payroll spending and real-time BI.
Papaya Global's Pricing:
Papaya offers various pricing plans for the different services they offer. You can also contact the company for a demo of their software.
Pros and cons
Pros:
- Can be used to pay international contractors too
- Their playform is backed by J.P. Morgan and Citibank
- Offers 24/7 customer support to ensure payments are paid on time
Cons:
- Employee profiles could be more detailed
- No mobile app available
Paychex PEO is an all-in-one HR solution that helps make it easier for you to manage employee benefits, HR, payroll, and compliance.
Why I chose Paychex PEO: Mainly because of its reputation in the industry. After comparing several options, I determined that Paychex PEO stands out due to its comprehensive services which include employee benefit management and HR consulting services. It offers a wide range of HR solutions, including payroll management, employee benefits administration, and compliance assistance.
Paychex Key PEO Services:
Paychex can get so much off your plate as a PEO provider, including processing your payroll, giving you easy access to employee benefits that are competitive with some Fortune 500 companies, and most importantly, providing you with personalized HR services.
It all starts with their HR technology platform where you can enroll in different benefits in a matter of clicks. It also lets you access analytics to be more efficient by saving time on administrative tasks.
My favorite service is its personalized HR guidance. This includes a US-based support team with an HR professional who can help you with strategy and solving HR-related questions, a payroll specialist, and an employee benefits specialist. These HR professionals will get to know your business and provide personalized recommendations.
Paychex Pricing:
Paychex offers ad-hoc pricing information. All you need to do is book a sales consultation where you can discuss your needs.
Pros and cons
Pros:
- Multiple HR professionals to support each client
- Nationwide coverage (US & Northern Europe)
- Improve talent retention
Cons:
- Potential loss of control of certain HR processes
- You need at least 5 employees to use PEO services
Best PEO provider for advanced benefits administration and HR consulting services
Paychex PEO offers a comprehensive suite of software and services for HR teams, including payroll, benefits, compliance, and insurance administration. Offered in tandem with their software platform (Paychex Flex), Paychex PEO provides additional expert support and HR consulting services. From recruitment and hiring to employee onboarding and payroll processing, many aspects of the employee lifecycle are covered.
Why I picked Paychex PEO: You can use their software platform to track your team’s daily hours, manage time sheets, approve PTO, and oversee pay and benefits in one place. Employees have a self-service portal where they can access digital copies of their pay stubs, see their contributions, and manage their retirement accounts.
Paychex PEO's Key PEO Services:
The payroll and benefits offered by Paychex PEO are comprehensive. They offer retirement savings plans as well as group health, dental, and vision insurance plans for your staff. Their benefit experts can also help you craft more unique employee perks, such as a flexible spending account (FSA) or a premium-only plan (POP), which can help your staff pay for unexpected but qualified medical expenses.
Their services also include payroll processing, including support from a dedicated payroll specialist when you need it. Payroll and tax deductions are also handled, helping you pay your employees accurately and on time, and ensuring compliance at the local, state, and federal levels.
In addition, Paychex PEO's services include access to a network of dedicated safety experts who can help you design customized employee training programs depending on your industry. This is especially useful for businesses operating within OSHA requirements and regulations, since they'll monitor any changes on your behalf.
Paychex's payroll software integrates with QuickBooks, Xero, Sage, BambooHR, JazzHR, Clover, Deputy, HIREtech, iCIMS, Indeed, Oracle Netsuite, and Ashby, among dozens of others.
Paychex PEO's Pricing:
Pricing starts from $39 per month with an additional $5 fee per employee per month, and you can request a free demo through their website.
Pros and cons
Pros:
- PEO services include access to a network of other subsidiaries for specialty services
- Offers 24/7 customer service for US clients
- Representatives are very knowledgeable
Cons:
- No free trial available
- Most services are tailored for US clients, though they have some representation in Europe
Best PEO company for staying competitive by accessing benchmarked salary data
ADP TotalSource is a full-service PEO solution that helps you outsource your HR functions to hire and manage global talent. Their combined services and software platform cover core HR functions, including international recruiting, top-level employee benefits plans, international payroll processing, global talent benchmarking, and new hire onboarding.
Why I picked ADP TotalSource: ADP TotalSource is an IRS-certified PEO that’s available in 180+ countries. Their PEO services also include additional HR expertise, plus international benchmarking data so you can ensure your new hire offers and compensation packages remain competitive in the global market.
Their software standardizes and digitizes the onboarding experience for your staff, including the set-up of employee records, company policy acknowledgments, and benefits enrollment, no matter where your staff are located. Their payroll module also helps you process payroll and ensures compliance with local tax laws thanks to their dedicated team of payroll specialists.
ADP TotalSource's Key PEO Services:
ADP's PEO Services include everything you'd expect: support for recruiting and hiring, benefits, payroll, and compliance. Their recruiting experts will help you source qualified candidates through a mobile-friendly career site, and will complete background checks on your behalf as well.
Their benefit specialists can help you create competitive health plans, as well as other employee perks and discounts such as commuter benefits, an EAP (employee assistance plan), and more. Plus, their payroll specialists will take care of all the typical payroll hassles, from your regular pay runs to paying bonuses, handling garnishments, or providing early wage access to employees who need it.
ADP TotalSource's Pricing:
Pricing details for ADP TotalSource are available upon request. You can also request a free demo through their website.
Pros and cons
Pros:
- Their knowledgeable staff act as your HR Business Partner for hire
- Can handle the needs of larger businesses or enterprises
- Well-known and trusted HR service provider
Cons:
- ADP offers many services and software packages, which can be confusing
- Geared towards hiring and managing talent within the USA
Worksuite offers PEO and EOR services in the US and Canada to help you establish and manage a global team of contract workers, freelancers, and/or employees.
Why I picked Worksuite: I chose to include this solution because of its focus on contractor and freelancer management, although it can also help you hire and manage employees. The company helps you stay compliant with local laws and requirements.
One thing that stands out is the company's risk management tools, which are aimed at avoiding misclassification errors. IC Risk Analysis and IC Classification tools help you vet every new hire to determine whether they should be classified as an employee or a contractor.
The company's contractor management system handles everything from sourcing to onboarding, management, and payment processes for contractors across 190 countries. The platform also boasts a user-friendly interface and 24-hour live support should you need it.
Worksuite Key PEO Services:
Worksuite's services include IC classification to mitigate the risks of employment misclassification, talent onboarding through tailored workflows according to residency, and invoicing through Worksuite Pay. Worksuite also handles talent sourcing, onboarding, management, and payment processes (including taxes and benefits), ensuring ongoing compliance. The company provides tailored demos to walk you through its capabilities in meeting specific contractor management needs.
Worksuite Pricing:
Pricing for this PEO solution is available upon request. A free demo is available to help you understand how it might suit your business needs.
Pros and cons
Pros:
- Personalized demos available
- Coverage in 190 countries
- 24-hour support
Cons:
- Platform comes with a learning curve
- Pricing is not transparent
CloudPay offers payroll and HR solutions to companies globally. Their main services are Global Payroll, Global Payments, and Global Pay On-demand.
Why I picked CloudPay: Their global pay on-demand service, called CloudPay NOW, makes them stand out among other PEO providers. CloudPay NOW allows your employees to withdraw wages they've already earned at a time that suits them, even before their scheduled payday. This happens from within the employee mobile app, and CloudPay automates the process, meaning it doesn’t result in extra work for your teams.
CloudPay's Key PEO Services:
CloudPay's global payroll services are available in 130 countries. Their ongoing compliance monitoring helps with risk management by reducing the chances of you falling foul of local regulations. Their software system also has features that let you automate administrative tasks to reduce manual work.
The company also offers analytics and reporting features. You can see the cost of payroll in each country you operate in and compare each one. You can also break expenses down by payment type to see payments, deductions, and bonuses in each country.
CloudPay's Pricing:
CloudPay doesn’t publicize pricing, but you can ask for more information on the website.
Pros and cons
Pros:
- The CloudPay Calendar makes it easy to build and schedule multi-country payroll workflows
- Integrations with popular HRIS/HCM systems are available
- Robust software implementation process
Cons:
- Pricing details are not transparent
- Their PEO services are limited to global payroll processing
Mercans is a global PEO and EOR provider that can support your global talent acquisition efforts. Their proprietary HRM SaaS product, HR Blizz, offers multi-country coverage for processing payroll for your global workforce, all within a single global platform.
Why I picked Mercans: I included Mercans because they don't involve any subcontractors, local service providers, or third-party payroll aggregators in their PEO services. Instead, they have 160 Mercans-owned entities spread around the world, enabling them to offer very fast turnaround times for their global payroll services.
They’re currently used by some very big-name companies, including Adidas, Audi, Bayer, Ford, IKEA, Johnson & Johnson, MasterCard, Mazda, Mitsubishi, Shell, and Tesla.
Mercans Key PEO Services:
Mercans offers a wealth of services to help organizations expand their operations globally, including global PEO, EOR, GEO (global employment outsourcing services), and global payroll. They also offer additional specialty services including HR management and advisory services, global mobility and talent management, incorporation and local compliance services, and business process outsourcing. Their service is top-notch, and to take it one step further, they'll even help your foreign employees access other essentials such as insurance, credit card options, and loans.
Their software system, HR Blizz, offers a centralized dashboard for viewing employee information and covers other basics like performance assessments, time tracking, and payroll processing reports. Their software also integrates directly with many common human capital management (HCM) and enterprise resource planning (ERP) systems, including BambooHR, Sage, SAP SuccessFactors, Oracle Cloud HCM, UKG Pro, and Workday.
Mercans' Pricing:
Mercans offers customized pricing upon request. You can also request a free demo through their website.
Pros and cons
Pros:
- Very fast customer onboarding process for new PEO clients
- Each client receives a dedicated account manager
- Internationally compliant with GDPR, ISO 9001, SOC 1, SOC 2, OWASP, and ASVS 3
Cons:
- No free trial available
- Pricing structure is not transparent
Best PEO company for flexible payment methods including cryptocurrency
Globalization Partners is a PEO company with extensive coverage that lets you hire employees in 180+ countries and pay in 180 currencies. The company also offers a comprehensive guide of the laws and requirements of each country so you can make informed choices about where to hire from.
Why I picked Globalization Partners: Working with Globalization Partners is easy. Just find the candidates you want to hire, and the company will onboard them and deal with payroll, benefits, and HR. You can track all this from within the company’s platform, which contains employee profiles, time off, and payroll.
New hires can be brought on board in days, with locally-compliant contracts. Employees can be paid in any of 180 currencies, using Venmo or bank transfers. I also appreciate their knowledge hub - Globalpedia - that tracks labor laws, norms, and regulations for all the countries they operate in, giving you peace of mind when it comes to employment compliance.
Globalization Partners' Key PEO Services:
Their core PEO services include employee onboarding, benefits management, and compliance. You are also relieved of the need to worry about legal, tax, or HR liabilities. Their staff can also assist with global expansion plans and executing global transactions as well.
Their software enables you to pay employees in 187 currencies. You can even pay employees with cryptocurrencies, although the legalities of this will depend on the laws and regulations of the country the employee works in.
Globalization Partners' Pricing:
Globalization Partners doesn’t publicize pricing, but you can request a quote on the website.
Pros and cons
Pros:
- Offers regional and in-country customer support 24/7
- Their country-specific knowledge hub (Globalpedia) is extensive
- Services come with a fully-customizable software product
Cons:
- The overlap between their different services and software products is confusing
- Pricing structure is not transparent
Other PEO Service Providers
Here are some additional PEO providers that didn’t make it into my top 10 PEO services shortlist, but are still worth considering:
- Zempleo
Best PEO company for international recruitment services
- Velocity Global
Best PEO provider for relocation services
- Remote
Best PEO provider for self-service HR tools
- Multiplier
Best PEO company for globally distributed teams
- QuickBooks Online
Best PEO company for small businesses
- Talent500
Best PEO provider with a talent network to help you source candidates
- Oyster HR
Best PEO company for compliant international hiring without a local entity
- Atlas HXM
Best PEO service for global mobility and immigration support
- Agile Hero
Best PEO provider with a strong network in the Asia Pacific and Oceania region
- Global PEO Services
Best PEO company for immigration and global mobility support
- Trinet
Best PEO provider for SMBs
- Engage PEO
Best PEO company for payroll & tax administrative services and workers' compensation assistance
- Infiniti HR
Best PEO service provider for risk management and general HR services
- Insperity
Best scalable PEO provider for midsize businesses
Related HR Software Reviews
If you're looking for better HR tools in addition to PEO companies, check out these other core HR offerings, that we've tested and evaluated:
- HR Software
- Payroll Software
- Recruiting Software
- Employer of Record Services
- Applicant Tracking Systems
- Workforce Management Software
Selection Criteria for the Best PEO Companies
Selecting the best PEO companies requires a thorough understanding of the comprehensive services these organizations offer, and how outsourcing strategic parts of your in-house HR services can get hours of administrative HR work off your plate. My approach to choosing the best PEO companies is grounded in thorough research into recent PEO market data coupled with my understanding of the specific needs and challenges businesses face when outsourcing HR functions.
Here are the specific criteria I used to carefully compare the service offerings of each PEO company in this list:
Core PEO Services (25% of total score): To be considered for inclusion in my list of the best PEO companies, each provider had to offer the following basic services:
- Payroll processing abilities for different types of employees (both full-time, part-time, and contractors), including calculating tax deductions
- The knowledge and experience to assist with recruiting and hiring, as needed
- Knowledge of, and monitoring support for compliance requirements at the local, state, and federal regulation level
- Assistance with mitigating workplace risks and managing workers' compensation claims
- The ability to provide training and development opportunities to enhance employee skills and productivity
- The willingness to partner with businesses of any size, from startups and small operations to midsize businesses, larger businesses, or enterprise organizations
Additional Standout Services (25% of total score): To help me narrow in on the best PEO companies out there, I also took note of any unique or less common services, including:
- The ability to offer and manage customizable employee benefits plans to support diverse needs for your existing staff and help attract new talent
- Specialized knowledge and support for compliance management in complex or heavily regulated industries
- Support managing unique employee wellness and engagement programs
- Advanced analytics and reporting capabilities to uncover actionable HR insights
- PEO services that cover a wide variety of countries
Industry Experience (10% of total score): To evaluate the industry experience of each PEO company, I considered the following:
- How many years their business has operated in the EOR space
- The depth of their global expertise, including how many different countries they offer PEO services in
- The combined experience and credentials of their team members, if available, including any specializations within specific industries
- Any recognition by industry peers or awards for excellence in PEO services
Customer Onboarding (10% of total score): To get a sense of each provider's customer onboarding process, I considered the following factors:
- The availability of comprehensive onboarding materials, such as fact sheets, guides, FAQ repositories, or other training resources
- Support for integrating the PEO provider's software with existing HR systems
- Direct access to onboarding specialists, customer support, or a dedicated account manager during the setup phase
Customer Support (10% of total score): Since the PEO company will act as a co-employer for your remote workers, it's important to ensure you'll receive timely communications and top-level support, for your employees and your in-house HR team. To evaluate the level of customer support each company offered, I considered the following:
- Multiple support channels, including phone, email, and live chat
- Whether the company offers a dedicated account manager or contact person for each PEO agreement
- The existence of a multilingual support team that covers different time zones
- Evidence of responsiveness and effectiveness in resolving issues, as inferred from customer reviews
Value for Price (10% of final score): To gauge the overall value of each service, I considered the following factors:
- Transparent pricing models without hidden fees
- Comparative analysis of service offerings versus cost
- Flexibility in service packages to suit different business sizes and needs
- Willingness to customize services to match budget restrictions
- Demonstrated ROI through efficiency gains and strategic benefits
Customer Reviews (10% of final score): Evaluating customer reviews is the final element of my selection process, which helps me understand how happy real users are with a service. Here are the factors I considered:
- Consistently high ratings across a variety of consumer review platforms
- Specific feedback on the ease of use of the PEO services
- Positive feedback regarding specific services or functions such as payroll or benefits management
- Testimonials highlighting exceptional customer support and quick problem-solving for complex issues
By using this assessment framework, I was able to identify the PEO companies that go beyond basic requirements to offer additional value through unique services, deep industry experience, smooth onboarding, effective support, and overall value for price.
Trends in PEO Services and Technology for 2024
PEO companies are at the forefront of redefining how businesses manage their human resources functions. To meet the changing needs of their clients, PEO companies have shifted their services and capitalized on advances in technology, such as artificial intelligence (AI) and blockchain integration. Here's a quick look at the ket trends affecting PEO companies, services, and technology as of 2024:
Specialized Services
- Increased Focus on SMEs and Startups: A significant trend is the emergence of services specifically designed for small to medium-sized enterprises (SMEs) and startups, providing them with scalable HR solutions that accommodate rapid growth and change.
- Industry-Specific Solutions: There's an increasing availability of industry-specific PEO services, catering to unique requirements of sectors like healthcare, technology, and retail.
- Shifting Service Demand: Services related to traditional, one-size-fits-all benefits packages are seeing a decline in demand as businesses shift towards more customizable and flexible HR solutions.
Technological Advancements
- Increased Use of AI and Machine Learning: AI and machine learning algorithms are being integrated into PEO solutions to further streamline HR processes, from payroll processing to personalized benefits packages. This integration also enables better predictive analytics and customized employee experiences.
- Automation of Compliance and Risk Management: Automation tools for compliance and risk management are becoming more sophisticated, reducing the manual workload and enhancing accuracy in monitoring changing regulations.
- Bespoke Employee Benefits Platforms: PEOs are developing more customizable benefits platforms that allow businesses to offer tailored benefits packages, meeting the diverse needs of their client's workforce.
- Blockchain for HR Operations: Some PEOs are beginning to explore using blockchain technology for secure and transparent HR operations, including payroll processing and employment verification.
These trends underscore the PEO industry's move towards more integrated, technology-driven, and personalized HR services. As companies continue to navigate the complexities of modern workforce management, PEOs that offer innovative, flexible, and specialized solutions are poised to lead the market.
What is a PEO Company?
A professional employer organization (PEO) is a company that manages employees on your behalf. It’s a way to outsource human resources functions that you don’t have the expertise for in your business.
When you use one of these services, you use a co-employment model. The PEO will take care of HR functions like payroll, employee benefits, tax filings, healthcare, and onboarding on your behalf. Meanwhile, the employee works for you as a regular employee.
PEO Services
PEO companies offer a wide range of services that cover all aspects of the employee lifecycle, from hiring and onboarding to termination and offboarding. Here’s a short summary of the key services I assessed to create this list of the best PEO service providers:
- Payroll Services: Payroll administration is a core HR service that most PEO companies offer. They take care of everything from payroll processing to submitting payments and managing paid time-off (PTO) to generating pay stubs. When you engage a PEO provider to help with your payroll, they'll also help organize your required payroll taxes as well.
- Regulatory Compliance: Good PEOs ensure you stay compliant with all relevant employment regulations and labor laws. Compliance support is especially useful if you're hiring in countries or managing remote workers in states with different tax regulations than where you’re based. Their local knowledge will help you stay proactive in terms of risk mitigation too.
- Employee Benefits: PEOs can help you create attractive benefits packages. They can help you create competitive benefit plans that include everything from health insurance to life insurance, plus workers’ compensation plans, commuter bonuses, and retirement plans. Some can also help you offer coveted employee perks such as flexible spending accounts (FSA) or health spending accounts (HSA), as well.
- Recruiting and Staffing: Some PEOs also offer international recruiting and staffing services to help you find employees within the global talent landscape. Once hired, many PEOs have their own HR software set up to help you onboard new hires using hassle-free automated workflows.
- Global HR Services: Many PEOs also offer global Employer of Record (EOR) services too. This is offered in cases where an organization doesn’t have a legal entity in the foreign country they want to hire in. In that situation, it’s a great way to hire employees in other countries to access global talent easily.
- Data Management: Many of the PEO service providers on this list have software that allows you to manage the services these companies provide. These include self-service features that help you with administrative tasks like approving payroll, generating contracts, and viewing reports. Some PEO companies also include employee self-service portals, allowing employees to update their own personal information with ease.
- Talent Management: Some full-service HR management providers will even manage things like employee training and performance management. This is usually more the case if you’re employing contract workers as opposed to in-house, full-time staff. Software solutions may also offer mobile apps employees can use for time tracking and other key tasks.
- Risk Management: A PEO company can help you identify and mitigate workplace risks to reduce your liability and create a safe work environment for your staff. Risk management can also lead to lower insurance costs and protect your organization against lawsuits.
- Workers' Compensation: You can also enlist a PEO company to manage all administrative aspects of your workers' compensation claims and insurance. This valuable service supports employees in case of work-related injuries while also managing costs and ensuring regulatory compliance.
- Customer Support: The best PEO companies offer access to expert help and HR consultants who can guide you through complex decisions or help you troubleshoot any unexpected issues that may arise.
Partnering with a PEO allows businesses to access a wide range of services that are crucial for efficient operation and strategic growth. By outsourcing these HR functions to PEO experts, companies can ensure compliance, attract and retain top talent, and maintain a focus on their core objectives.
Benefits of Using a PEO Company
Partnering with a PEO company can help businesses transform their HR operations significantly. For companies contemplating HR outsourcing, understanding the benefits of a PEO partnership can provide the clarify and confidence you need to move forward with your decision. Here are several benefits that illustrate the significant impact a PEO company can have on your HR operations:
- Streamlined HR Administration: From payroll processing to benefits administration, PEOs take on the burden of HR operations, allowing companies to focus on core business strategies and growth, while HR professionals can concentrate on more strategic HR initiatives.
- Cost Savings on Employee Benefits: By leveraging their buying power, PEOs negotiate better rates for health insurance and other benefits, making it possible for small and medium-sized businesses to offer competitive packages that attract and retain top talent.
- Compliance and Legal Expertise: This service is invaluable as it minimizes the risk of non-compliance penalties by keeping your business up to date with local, state, and federal regulations, saving time and reducing legal risks.
- Risk Management and Safety Programs: Through developing comprehensive risk management strategies and implementing safety programs, PEOs help reduce workplace accidents, lower insurance costs, and create a healthier work environment for your employees.
- Enhanced Employee Performance Management: By providing systems for feedback, performance tracking, and development plans, PEOs can help businesses enhance employee engagement and productivity, which contributes to overall business success.
Using a PEO company offers a strategic advantage by allowing businesses to allocate their resources more effectively, focusing on growth and innovation while ensuring that their HR functions are managed efficiently and professionally. This partnership not only enhances operational efficiency but also fosters a more engaging and compliant workplace culture.
Costs & Pricing for PEO Companies
PEO companies typically offer flexible pricing models to accommodate the diverse needs of their clients. Some offer monthly rates based on the number of employees you have, while others have per-user pricing in addition to a flat monthly rate. Other options include pricing as a percentage of your payroll, bundled services, or custom pricing depending on the specific services your business needs.
Here's a breakdown of the different pricing options PEO companies generally offer:
- Per-Employee Fee: This is one of the most common pricing models used by PEOs. Under this model, the PEO charges a fee based on the number of employees you have. This fee can be billed monthly, quarterly, or annually. It's a straightforward model that scales with the size of your workforce, making it easier to predict costs as your business grows.
- Flat Monthly Fee: Some PEOs offer a flat monthly fee for their services. This model is less common and is typically used by small businesses with a stable number of employees. The flat fee is agreed upon in advance and covers all the PEO services outlined in the contract.
- Percentage of Payroll: Another pricing model is based on a percentage of the client's total payroll. This model directly ties the PEO's fees to your monthly payroll expenses. However, anticipating monthly fees is more challenging in this model if your company's payroll varies significantly from month to month.
- Bundled Services vs. A La Carte: Bundled services provide a comprehensive package of HR services for a single price, offering value for businesses that need a wide range of HR support. Alternatively, a la carte pricing allows you to select and pay for only the services you need, offering flexibility and potentially lower costs.
- Custom Pricing: For larger or more complex businesses, PEOs may offer tailored service packages with pricing that reflects the specific needs and circumstances of your business. Custom pricing is negotiated on a case-by-case basis and can provide a more precise fit for unique business requirements.
Plan Comparison Table for PEO Pricing Models
| Pricing Model | Description | Best for |
|---|---|---|
| Per-Employee Fee | Charges a fee based on the number of employees. | Businesses of any size, especially those scaling up or down. |
| Flat Monthly Fee | A predetermined monthly fee covering all services. | Small businesses with a stable number of employees. |
| Percentage of Payroll | Fees are a percentage of the total payroll. | Businesses with variable payroll expenses. |
| Bundled Services vs. A La Carte | Offers comprehensive packages or selectable individual services. Provides flexibility and potential cost savings. | Businesses seeking specific services or comprehensive HR solutions. |
| Custom Pricing | Tailored packages and pricing for unique business needs. Negotiated on a case-by-case basis for a precise fit. | Larger or complex businesses with specific requirements. |
Understanding these different pricing models and how they align with your business objectives is crucial when selecting the right PEO partner for you. Transparency in pricing and a clear understanding of the services included are also key factors to ensure there are no unexpected costs or gaps in service.
PEO Companies: Frequently Asked Questions
Here are some answers to questions we hear frequently about professional employer organizations and how they work:
How do PEO companies work?
A professional employer organization (PEO) is a company that hires employees on behalf of businesses. It’s a way to outsource human resources functions that you don’t have the expertise for in your business. Small business owners often employ them to gain access to HR expertise such as payroll, creating benefit plans, or employee onboarding.
When you use one of these services, you use a co-employment model. The PEO takes care of HR functions like payroll, employee benefits, tax filings, healthcare, and onboarding on behalf of the client company. Meanwhile, the employee works for you as a regular employee.
PEOs offer various service options that cover the entire employee lifecycle from recruitment to offboarding. Although, many focus on payroll and HR compliance. They’re increasingly common, with the National Association of PEOs estimating that 173,000 small to medium-sized businesses in the US alone use a PEO company.
How can I benefit from using a PEO?
The main benefit of a PEO is that you get access to HR expertise without hiring HR professionals to perform these tasks. This reduces your risk of falling foul of employment law or regulations. If you have a small team, it can be far cheaper to use a PEO than to hire dedicated HR staff.
Many businesses also use PEOs when they want to hire employees abroad without actually opening offices in these areas. They hire staff via their PEOs legal entity in the foreign country to ensure you hire employees in a way that adheres to local regulations.
US-based PEO companies are also accredited by the Employer Services Assurance Corporation (ESAC). This gives customers additional peace of mind as accreditation ensures each PEO company is operating within a well-established set of industry-specific guidelines. The ESAC is a nonprofit organization run by industry professionals who bring more than 100 years of PEO regulatory experience together.
What's the difference between a PEO company and a staffing agency?
On the surface, it may seem like a PEO company is similar to a staffing agency, however, their business models are quite different. Let me explain.
- The client relationship is different. A PEO company uses a co-employment arrangement with their clients, which allows them handle numerous HR functions on behalf of the client company. On the other hand, a staffing agency does not establish a co-employment arrangement. Instead, they act as an intermediary between job seekers and the client company looking to fill an open position.
- The HR functions they offer are different. PEO companies offer a comprehensive suite of HR administration services, including payroll processing, benefits administration, compliance and risk management, workers’ compensation assistance, and HR consulting. In contrast, a staffing agency has a much more narrow focus on talent acquisition and filling vacant roles. They may also conduct background checks and pre-employment skill assessments, but their services don’t go beyond that.
- The length of the relationship is often different. Typically, when a business invests in partnering with a PEO company, they’re looking for a long-term relationship. However, staffing agencies are more often used on a short-term basis to quickly fill vacant roles or find temporary staff for specific projects or seasonal roles.
How do PEO companies handle data privacy and security?
PEO companies prioritize data privacy and security through various measures including encryption, secure data storage, and regular security audits. They comply with legal regulations such as GDPR in Europe or HIPAA in the United States, ensuring client and employee information is protected against unauthorized access and data breaches.
These firms often hold certifications that demonstrate their commitment to security standards, and they work continuously to update their policies and technologies in response to evolving threats. Typically, the security safeguards that a PEO company has in place are shared publicly on their website.
What are the typical contract terms with a PEO?
Contract terms with a PEO can vary widely depending on the services provided and the needs of the business. Typically, agreements range from one to three years, with options for renewal. Contracts outline the scope of services, fees, responsibilities of both parties, and termination clauses.
It’s important for businesses to understand the specifics of the contract, including how fees are structured (e.g., per employee or a percentage of payroll) and conditions under which the contract can be terminated early. Be sure to ask these questions when looking into PEO companies and ensure the answers align with your business requirements and expectations.
Can PEO services be customized for small businesses?
Yes, PEO services can be highly customized for small businesses. PEO companies usually offer a range of services from payroll processing to benefits administration, HR consulting, and regulatory compliance assistance. Because of this range, services are usually tailored to the specific needs of each client.
This flexibility allows small businesses and startups to choose the services that best fit their needs and budget, ensuring they receive the support necessary for growth without the overhead of a full internal HR department. Customization also extends to scaling services as the business grows, providing a flexible solution that adapts over time.
PEO vs. EOR Services
Many employer organizations operating in the global workspace do offer both PEO and EOR services. So what’s the difference, and what does each type of service include?
Professional employer organizations (PEOs) work on your behalf to cover common functions like payroll, tax filing, international benefits administration, and HR services. Technically, you’re only outsourcing specific functions to the PEO organization though, meaning the employees who benefit from these services are still considered your organization’s employees. In addition, you’re required to already have a legal entity set up within a foreign country in order to use PEO services within that country.
An employer of record (EOR) is used when an organization wants to hire internationally, but they have no legal entity in the foreign country where their potential workers are located. Technically, when using an EOR provider, foreign workers are hired by the EOR and not your parent organization. Instead, the EOR becomes the full legal employer and manages all aspects of their employment while they perform work on behalf of your company.
For further guidance check out our article on the difference between a PEO and EOR.
Other HR Outsourcing Resources
To further assist you in your journey, here are some links to other global HR resources as well. If you have more questions, these links are a great place to start:
- Best Employer of Record (EOR) to Consider for HR Outsourcing
- Best Global HR Service Providers
- How Global HR Services Can Support International Teams
- Best Global Payroll Solutions for Distributed Teams
- Best HR Outsourcing Services
PEOs are the Easiest Way to Achieve Global Expansion
Now that the war for top talent has gone global, PEO companies are an important ally for businesses of all sizes, whether you're an SMB or an enterprise organization.
The best PEO companies offer all the HR support you need to run your business. They let you focus on the things you’re good at while ensuring you stay compliant with international employment laws.
To choose the right PEO, think about the HR tasks you need to outsource and look for one that meets those needs.
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