Can A Startup Use A PEO?

A professional employer organization (PEO) is a natural fit for startups, because a PEO can offer access to enterprise-grade HR services for organizations whose time, money, and expertise are scarce and of high-value.

Specifically, a startup working with a PEO delegates employee management functions – like payroll, benefits, retirement programs, insurance benefits, etc. – without losing control over their workforce. Because PEOs have many clients, they can often offer premium services at economy-of-scale pricing accessible even to small organizations just getting off the ground. A PEO is a dedicated, professional entity that will shoulder the vast, complex, and elusive ins and outs a startup may encounter.

Here are some of the many advantages of using a PEO:

  • Reduced Payroll Burden – PEOs can handle the benefits, payroll calculations, filings, disbursements, and associated acquisitions or terminations of an organization.
  • Compliance – PEOs enable young companies to manage the local business law in the hiring and staffing process while focusing on the other key elements of the organization.
  • Better Benefits – A PEO can offer other critical benefits aside from providing HR services. PEOs possess the resources to offer health insurance and 401(k) plans to new employees. With their well-developed infrastructure, PEOs can provide benefits a smaller firm could not offer on its own; this makes the startup more attractive to top talent while simultaneously lowering turnover rates.
  • Reduced Liability – PEOs are also equipped to assume liability by sharing the risk of employment-related legal issues. If the startup happens to run into any legal trouble regarding hiring, staffing, or employment, legal liabilities that might otherwise obliterate a new company are shared or absorbed by a PEO partnership.

Startups have a lot on their plates.  Administrative HR tasks don’t have to be a burden.  If you have questions about how a PEO can benefit your startup, please contact CCPEO Consulting at 817-233-4551 or [email protected].