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What is a PEO?

A PEO offers outsourcing services to support businesses with critical HR administrative functions such as payroll processing and benefits administration. PEOs may also assist companies with risk management and regulatory compliance. From onboarding to annual benefits enrollment and talent management, a PEO provides HR support throughout the employee life cycle.

Benefits of a PEO

The expertise and streamlined administrative services of a PEO offers clients the opportunity to lower the costs of payroll and benefits management. When you engage the services of a PEO, your company can access the knowledge and resources required to navigate changes in the HR landscape. Working with a PEO can  further benefit companies by helping to mitigate employment risk. In short, you'll gain the peace of mind knowing that your HR department has access to the support it needs to follow best practices.

Cost savings

PEOs are able to leverage the cost of their services among numerous clients. This in turn can lower the pricing of HR administrative services when compared to the cost individual companies might incur if they chose to build the same internal processes and procedures from the ground up. Rather than invest the extra dollars and resources into an administrative function, companies can use a PEO and shift the cost savings over to their core business.

Time Savings

Many businesses spend a lot of time on administrative tasks that take away time that may be spent on other major areas of their business. One solution to this problem faced by many businesses would be to use a PEO which can help your business by freeing up time spent on those administrative tasks. According to a study* conducted by Oasis, a Paychex company, 36% of the respondents said using PEO during the pandemic helped to free up their time. 

Benefits offerings

PEOs are able to recommend and administer cost-effective benefit plans to provide employees with top-tier options at the best possible price level. Growing companies recognize that benefits are an important consideration for many job candidates. Working with a PEO can help you offer your employees a competitive benefits package, which can help increase job satisfaction and employee retention.

Compliance

Managing the complexities of legislative and regulatory compliance can be challenging for companies with employees in a multitude of geographic locations. A PEO can provide support to clients to assist with their compliance with applicable federal and state employment laws, privacy regulations, and HR policies

How does a PEO work?

A PEO allows companies to outsource key administrative functions. This involves a contractual allocation and sharing of some employer responsibilities between Oasis and the client. The PEO relationship is different from employment leasing, where workers are assigned to a company on a temporary basis for projects or other short-term work.

How does the PEO Relationship work?

A service agreement between a business and a PEO allows the PEO to manage specific administrative services for employees. The business remains the employer and maintains all responsibility to supervise employees and oversee their daily responsibilities. The PEO will manage clearly defined functions identified in the client service agreement such as payroll and benefits administration.

Other PEO FAQs

How many businesses use a PEO?

Both large and small businesses have come to realize the benefits of working with a PEO to assist with a range of services. Currently, PEOs in the United States provide services to nearly 180,000 businesses employing between 2.7 and 3.4 million people. A recent Oasis survey of 299 U.S. small business owners and managers revealed that 23% of respondents said they had outsourced some of their company's HR administration tasks, up from 15% in the prior year. Further, 23% said they were "likely to outsource HR administration in the next twelve months."

What's the difference between a PEO and HR software?

A PEO offers personalized HR support while software ultimately leaves the responsibility for HR administration in the hands of the employer. PEOs allow companies to outsource key administrative functions such as payroll and benefits administration . When using a PEO, companies can receive guidance to help them maintain compliance with federal and state employment laws as well as support various areas of HR. Comparatively, HR software may simply only provide a platform for you to manage these activities on your own.

How can a PEO help control HR costs?

A PEO's economy of scale can help lower employment costs and increase the bottom line for clients, across the board. Companies can maintain a simple in-house HR infrastructure by relying on their PEO, thereby help to reduce hiring overhead. PEOs such as Oasis can also provide critical assistance with regulatory compliance, as well as time savings by handling administrative activities that can be routine or redundant. Insurance costs are another potential savings area. Required coverage such as workers' compensation insurance can carry a large cost when purchased individually by smaller businesses, but a PEO can provide coverage to all clients, regardless of size, with a higher degree of price efficiency.

How Oasis PEO Services can help your business

From setting up payroll, to assisting with employment-related regulatory compliance, Oasis can work with you to support your employees. Our service model provides cost savings, risk mitigation, and world-class benefits to your organization. If you'd like to learn more about how Oasis can help you, don't hesitate to contact us for additional information.

* This national survey was conducted with 300 business leaders and managers from the hospitality sector who employed between 11 and 250 employees. The online interviews were conducted by Bredin, an independent market research company located in Boston, MA, from April 21 to May 16, 2021. Of the 300 survey participants, 81 percent were from Accommodation and Food Services (AFS), and 19 percent were from Travel Arrangement and Reservation Services (TA).

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When you work with Oasis, you are able to take full advantage of our size, strength, and relationships with leading benefits providers. We provide remarkable value by offering integrated, cost-effective solutions for your business.