A professional employer organization (PEO) company is a company that provides comprehensive HR services, such as payroll, benefits administration, risk management and compliance, recruitment and hiring, and human resources support. By outsourcing these services, companies can achieve significant cost savings compared to the costs of an in-house HR team, streamline their HR processes faster, and focus on other business tasks. 

Businesses that lack internal HR teams face a variety of challenges that PEO companies are well-equipped to solve:  

• Navigating complex and ever-changing federal, state, and local labor laws to ensure compliance 
• Time-consuming payroll, benefits, and HR paperwork 
• Lack of HR expertise to handle complex tasks 
• Protecting sensitive employee data, storing, and managing it in a secure way 
• Budget constraints for hiring an internal HR team 
• The challenges of adapting HR processes to the growth and expansion of the company 
• Providing competitive benefits packages that meet employee needs 
• Attracting, onboarding, and retaining top talent 

Although many businesses can benefit from this kind of HR outsourcing, the best company size for PEOs is small to medium-sized businesses, typically with 10 to 200 employees. 

Success story 

The upcoming success story underlines the crucial contribution of hiring a PEO company to greatly improve your employee processes: 

• Challenge: A pharmaceutical corporation needed an expert to manage the technical aspects of software development for its new public platform. The challenge was in finding a candidate with a very rare combination of technical, UI/UX, business, and communication skills. 
• Solution: DevsData Tech Talent, a PEO company that specializes in tech recruitment, created a custom multi-step recruitment process to check candidates' soft skills and technical expertise. The candidates went through several HR calls with recruiters, and they also needed to go through technical steps, including algorithmic tests, programming assignments, and technical interviews, to confirm their qualifications. 
• Result: After 3 months, the client hired the tech expert it was looking for. The outcome was so positive that the company hired DevsData Tech Talent for 4 new international recruitment projects. 

PEO companies provide extensive HR services and support to their clients, from recruiting new employees to managing payroll and benefits and other complementary tasks. 

Here is a breakdown of common PEO services: 

• Payroll processing 
  Process employee paychecks, handle taxes and compliance 
• Benefits administration 
  Administration of employee benefits, including health insurance, retirement plans, bonuses, and other job perks 
• Risk management and compliance 
  Ensure compliance with workplace and employer regulations, providing employees' compensation insurance, and managing workplace safety risks 
• Recruitment and hiring 
  Find top quality job candidates, moving them through the recruitment process, and onboarding new employees 
• Employee training and development 
  Professional development of soft and hard skills and various employee training programs 
• Employee performance management 
  Individual employee development plans and development of a performance assessment system 
• HR software 
  Provide various HR tools for attendance tracking and other HR management processes 
• HR support 
  Additional HR services like creating employee handbooks and managing employee relationships 

Success story 

To further understand the benefits of hiring a PEO company, our experts highlighted the following case study as an example of a successful recruitment project accomplished by EchoGlobal: 

• Challenge: Homeflow, an agency that creates software for real estate agents, was looking to expand its team with skilled front-end and back-end developers who can build bespoke websites and maintain existing applications. 
• Solution:EchoGlobal took on the task of finding developers with expertise not only in the latest technologies, but also in handling legacy websites using ES5, jQuery, and Backbone. 
• Result: Within a short timeframe, Homeflow managed to hire a team of developers that helped fix around 1,000 UI/UX bugs, build new JS components, and optimize existing apps. 

The main difference between a payroll and a PEO company is in the scope of services they offer and the nature of their relationship with the client.  

The cost of PEO service depends on factors like the number of employees, range of services provided, level of customization required, and the overall complexity of the client's HR needs. 

Typically, PEO companies charge between $900 and $1,500 per employee per year for a standard flat fee. However, if the client wants to be charged as a percentage of the company’s overall payroll, PEO companies charge between 3% and 10% on average. 

The top 50 PEO companies on DesignRush charge an average of $65/hour. Roughly 25.9% of the PEO companies on DesignRush accept projects under $1,000, while 3.7% require a $50,000+ minimum budget. 

You should hire a PEO company to streamline HR tasks, reduce administrative burdens, access better employee benefits, and ensure compliance with employment laws through a co-employment arrangement. 

You should outsource PEO services because PEO companies: 

• Have teams of experienced HR professionals with expertise in managing HR processes 
• Allow for savings on HR administration costs, benefits, and insurance premiums compared to in-house HR teams 
• Help with staying compliant with complex employment laws and regulations 
• Provide access to a wider range of employee benefits and retirement plans at competitive rates 
• Assist with risk management, including workers' compensation and liability insurance 
• Use advanced HR technology and software for payroll, benefits administration, and employee management 
• Allow you to focus more on your core business activities rather than HR and administrative tasks

Success story 

To better visualize the benefits of hiring a PEO company, our agency research experts highlighted the following case study by Web Recruiters. 

• Challenge: A UK-based technology company had a rapidly growing team and needed to find expert Ruby on Rails developers in Ukraine. 
• Solution: Web Recruiters screened candidates for specific job requirements and sent out a targeted selection of suitable people. 
• Results: Thanks to the PEO company's efforts, the client hired 2 Ruby on Rails developers in a short time that integrated well with the rest of the team. 

To choose the best PEO services for your business, consider the company’s experience in your industry, existing portfolio, case studies, pricing plans, scope of services, and team qualifications. 

Based on your company's needs, you should focus on these steps: 

1. Identify your goals 
   Define which HR tasks, such as payroll processing, benefits administration, compliance issues, and employee relations, you need to outsource. 
2. Find the right expertise 
   Browse online directories like DesignRush to look for PEO companies with a proven track record of successful collaboration with companies from your industry and with similar needs. Explore their portfolio of services to ensure they provide all HR tasks you need. 
3. Set a budget
   Determine the amount you can invest in HR management, typically on a monthly or yearly basis. 
4. Review agency experience 
   Ask for a portfolio of relevant work, client testimonials, success rate, and other proof that the company delivers high-quality services. 
5. Ask about the pricing plan 
   Find out if the PEO company charges per employee, per month, or using another pricing structure. 
6. Inquire about project reporting 
   Ask the company which metrics it tracks and how it measures the quality of HR services and employee satisfaction rates. 
7. Ask for proposals 
   Send a request for a proposal (RFP) to the shortlisted PEO companies. 
8. Interview 
   Set up interviews with prospective PEO companies to discuss the project in detail and determine if they fit your team well. 
9. Make a decision 
   After reviewing the RFPs, choose the best-suited agency and establish all project development processes. 

If you need a custom-made list of PEO companies, contact us. Our team will provide the list of agencies that are the best match for you based on your list of requirements. Check out our Marketplace for more details. 

Leveraging our agency's filters, you can find the best PEO company on DesignRush. Shortlist them by choosing from agencies that can cater to projects from $1,000 to above $50,000 based on your budget.  

Our agency directory also lets you browse agency profiles based on location, area of expertise, agency reviews, client types, team size, budget, and hourly rates so you can compare PEO companies comprehensively and find the best fit for your project. 

The key success metrics PEO companies use are recruitment, payroll, compliance processes, and employee retention and satisfaction. 

Typical key success metrics in PEO services include the following: 

• Payroll accuracy and compliance 
  Metrics that include payroll processing timeliness, tax compliance, and mistake rates 
• Employee turnover 
  The rate at which employees leave a company and are replaced by new hires 
• Employee retention 
  The measure of a company's success in keeping its employees and reducing employee turnover 
• Regulatory compliance monitoring 
  Conformity to tax rules, labor legislation, and industry-specific standards 
• Time-to-fill
  The number of days it takes to fill a job vacancy from the time the job is posted to when a candidate accepts the offer 
• Diversity, equity, and inclusion (DEI) metrics 
  Inclusion survey results, equality in promotions, and diversity ratios 
• Employee satisfaction 
  Overall satisfaction, employee feedback ratings, and response to employee inquiries 
• Cost of employee turnover 
  Direct and indirect costs of losing an employee including productivity drop and recruitment costs 

You should ask PEO companies about the relevant experience in your industry, a portfolio of previous work, the pricing plan and structure, team qualifications and competences, availability, and the scope of HR services they provide. 

Ask them about the following: 

Its Relevant Background 

1. How many years of experience do you have in PEO? 
2. Do you have a portfolio of successful collaborations? 
3. Do your team members have relevant education, training, and certifications? 
4. Have you worked with clients from my industry? Are you familiar with its specifics? 
5. What scope of HR services do you provide (payroll, benefits, compliance, etc.)? 

Its Services and Processes 

1. What payroll processing services do you offer? 
2. What types of employee benefits do you offer? 
3. How do you manage benefits, administration, and compliance? 
4. What support do you provide for workplace safety and workers’ compensation? 
5. How do you ensure compliance with federal, state, and local employment laws? 
6. What HR technology platforms do you use? 
7. How do you handle the onboarding of new clients and their employees? 
8. What responsibilities do we retain, and what does the PEO handle? 

Related to Your Project 

1. Do you offer customized services tailored to my business needs? 
2. How do we define project deliverables and how do you ensure we get them?  
3. How many dedicated PEO professionals will I work with? 
4. What metrics will you use to define the quality of your HR services? 
5. How often will you provide us with progress and employee reports? 
6. What is the planned budget? Are there any additional costs we can expect? 

The best 5 PEO companies in the US are: 

1. DevsData Tech Talent 
   • 5.0 stars on DesignRush (37 reviews) 
   • 5.0 stars on Google (29 reviews) 
   • Top clients: Cubus AS, Novartis AG, Epinode, Idealab Inc 
2. Remofirst 
   • 4.8 stars on DesignRush (6 reviews) 
   • Top clients: Mastercard, University of Cambridge, Zocdoc, Microsoft 
3. ExtensisHR 
   • 4.1 stars on Google (84 reviews) 
   • Top clients: Brooklyn Urban Garden Charter School (BUGS), You & Mr Jones, Jane Barr Horstman & Associates, Connections Mentor Inc 
4. G&A Partners 
   • 3.7 stars on Google (26 reviews) 
   • Top clients: Amazon, United Supermarkets, The Archdiocese of Galveston-Houston, Logicalis 
5. Insperity 
   • 3.7 stars on Google (3 reviews) 
   • Top clients: Thompson Safety, Liberty Bank and Trust, CyberDyme, BigCommerce 

Scroll up to discover more about these and other PEO companies. All the agencies were carefully selected based on successful projects, industry reputation, customer reviews, and team expertise. Personalize your search and sort companies by location, budget size, hourly rates, and reviews.