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The Advantages of Using a PEO for Your Business

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What is a PEO? The acronym stands for “professional employer organization.” A PEO is a company that can help you with various aspects of your business, including HR, payroll, expansion into new markets, compliance with the law, even handling tax remittance and compliance. In this post, we take a look at the advantages your company can gain by working with a PEO.


Business owners and managers understand the importance of putting every dollar to good use. As a business grows, the scope of work it needs to handle also grows accordingly. At this point, it would be helpful to get assistance from a firm that will supply experts. That’s because you need professionals who are ready to handle some of the most challenging aspects of keeping your business going. Companies that need to outsource some of their heaviest workloads hire a professional employer organization (PEO). But what is a PEO, and what advantages does your business gain by hiring one?

What Exactly Is a PEO?

A PEO is a company that enters into an agreement with another to help the hiring company handle various aspects of their business. Depending on the arrangement, these aspects can include HR, payroll, expansion into new markets, compliance with the law. They can even include handling tax remittance and compliance.

Hiring with a PEO

In a world that is getting increasingly connected, and where more businesses are establishing international entities in different countries, hiring is moving faster than ever. Positions open up all the time. If you do not move fast enough, you might miss out on great, qualified, and capable candidates. The main challenge here is that you might not be able to focus on everything going on in the world while running your business. Therefore you might not be able to keep up with the hiring process.

Also, when you think about the time and money it takes to find, hire, and onboard great candidates, hiring the wrong candidate can lead to massive losses of both time and money for your business. A good PEO will offer recruitment and onboarding assistance. This can help you find experienced candidates who are right for your business.

A PEO will also help you find the right candidates in regions where you do not understand the language or cultural nuances, both of which can lead to confusion and ending up with the wrong hire.

Reduced Business Costs and Increased Profits

One of the biggest benefits of using a PEO is reduced business costs and increased profits. Reputable PEOs operate using the best practices and latest technology. This will save you lots of time and money. Outsourcing various functions to a PEO also means that you will not have to incur the costs often associated with having a team of in-house staff.

Payroll is another important area where many businesses spend a lot of money. Using a PEO to handle payroll processing and related issues can help reduce those costs. This is because a PEO will use the latest automation technology. They can take care of payroll issues at a scale your business would otherwise have trouble handling.

To ensure you save the maximum amount, try to go with a PEO that charges a single, straightforward fee. Avoid a PEO that charges different fees for different services such as annual, monthly, or quarterly reports.


Reducing Your Risk and Exposure

A PEO can shield you from a lot of liability, especially those that arise from issues that concern your employees. Do not take this to mean that you will have no exposure. However, many PEO organizations are well-equipped to deal with issues such as employee sexual assault before they become bigger issues for your company.

Additionally, a PEO will ensure your business is adhering to employment laws. Employment laws are continually evolving. Additionally, if a part of your business is located in a foreign country, this issue becomes even more complex. Failure to keep up with all the HR laws, rules, and regulations can expose your business to multiple risks and can end up costing your business a good deal of money, including fines. It could even mean severe damage to your business’s reputation.

Moreover, if you employ remote workers, you will likely have to comply with the employment laws in their city or country. Do you have all your sick policies in place and up to date? These are just some of the things a PEO will handle for you. Any of these can be a massive headache if they are not handled properly.

Global Expansion

PEOs are critical for businesses that want to expand into new regions, as they offer a range of services you will need for this type of expansion. Many of these services are also available to companies that want to keep their operations small. However, they are vital for businesses that want to expand their footprint.

One of the most important things PEOs do if you are looking to expand into a new market such as Germany is to ensure you are fully compliant. That might be by ensuring all your employee contracts are fully compliant or ensuring your have met all tax obligations.

A German PEO, such as New Horizons Global Partners, will also serve legal and human resources functions. For example, they will take care of hiring, contract renewals and terminations, and benefits distributions. New Horizons Global Partners will also give you a presence in Germany if you need one. Or they will help you to expand into Germany even without establishing a local entity. If you are looking to expand into Germany, or another region, visit New Horizons Global Partners to learn more about PEO. Find out about the benefits they can provide for your business.


A PEO gives you flexibility in the hiring, reassignment, and termination of employees as your business, its needs, and your focus change. There are many reasons why you may need to reassign staff or let them go. These reasons can include political instability, a changing business environment, a pandemic, or a weak economy.

Companies that work with PEOs also find it easier to restructure their employees’ contracts. For example, a company might decide to reduce working hours or days so as not to have to let some of their employees go. PEOs can help businesses reduce the costs of keeping a business running when production is low.

Additionally, a PEO puts a business in an excellent position to bounce back once everything is resolved. This can include hiring old employees back or hiring new employees to help increase production and revenue. These moves make it possible for a business to restore employees’ normal working hours.

Workers’ Compensation

Handling workers’ insurance claims and premiums is both costly and time-consuming. A reputable PEO will handle both of these for your business. This is because they will provide their own workers’ insurance program. They will take care of audits, compliance, paperwork, and the certifications all of this requires.

Reputable PEOs work with and give your business access to workers’ compensation and insurance specialists. These specialists understand your business and its industry. Therefore, they can tailor the types of insurance they offer by working with your HR department to ensure proper coverage. In addition to helping your workers get compensation when issues arise, they also help mitigate risks and direct workers to the answers they need regarding insurance and coverage.


Enjoy the Advantages of Using a PEO for Your Business

Working with a PEO helps relieve businesses of some of the burdens and responsibilities associated with running a business, hiring and onboarding new employees, and staying compliant. PEOs are also a critical component for businesses that would like to expand into new countries and regions.