Will I Be in Control If I Use a PEO?


Small business is hiring PEOs, Professional Employer Organizations to help them with employee-related issues. The co-employment relations between your business and a PEO can sometimes be challenging to understand.

Sometimes, employers feel that when they agree with a PEO, they are going to lose control of their employees and the workforce. The co-employment means that technically your employees have two employers, but you, as the business owner, are still going to manage your business, employee, tasks, and schedules.

What do PEOs Help With?

PEOs help businesses in many ways, mostly focused on tasks related to HR and employees. When you partner with a PEO, you get help with items such as:

  • HR and payroll – handbooks, compliance, supervisor training
  • Benefits – health, life, involuntary insurance, significant company benefits for less, 401 (k)
  • Employment Risk Control – workers compensation, safety training, and unemployment claims management

PEOs work in the back office, and employers still have control over their employees. PEO partnerships allow for small business owners to focus on their businesses. As a client of a PEO, your business will still be the employer, maintain the supervision of your employees, and managing your business.

PEOs Change the Classification of Employees

Many business owners are under the assumption that when they partner with a PEO, because they enter into a co-employment agreement and share employees, which enables the PEO to become the “employer of record” for payroll and tax purposes. But many businesses use PEOs and know that through the partnership, they do not lose control of their employees.

Service Agreement

Signing the service agreement does not mean you lose the control of your employees. As co-employers, you still retain the legal authority of your employees. You will control your employee’s schedules, determine their job titles and tasks, and you will handle all your business outside of human resources.

Controlling Your Business

A business owner enters a contract with a PEO typically because they need help and feel like they are losing control. A PEO company will help a business by taking some of the burden when it involves payroll and human resources away from you.

Here are other ways that a PEO can help you in reclaiming your business and focus on growing company:

  • Lets you focus on essential elements – running a business can be overwhelming. When you partner with a PEO, some of the responsibilities such as workers compensation taxes, workplace safety programs, payroll, and HR compliance are taken care of so you can focus on your services and products.
  • Increase your Cashflow – when a PEO takes over the responsibilities of your business’s human resources, such as workers compensation, unemployment, health benefits, employee payroll, and taxes, your business cash flow will increase. You can utilize a co-employment partnership to qualify for reduced tax rates and pay less money towards premiums. This gives you extra cash flow to invest back into your business.
  • Leaves You with Control – partnering with a PEO does not mean you will lose control of your business. The co-employment agreement with PEOs cuts through the confusion of HR and administration tasks and lets you focus on running the other parts of your business.

Final Thoughts

Choosing a partner with a PEO will still let you be in control of your business. Start your search for PEO companies at Retire At 21. If you are committing too many tasks and spending the majority of your time on human resources, payroll, and administration, then a PEO service might be worth partnering with, so you can gain back control of your business.

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