What is a PEO [Professional Employer Organization]?

categories: Blog, Case Study

What is a PEO?

A PEO, or professional employer organization, provides HR solutions by grouping employees from several companies in order to reduce healthcare prices, create access to benefits and other perks, and streamline compliance.

Why Use a PEO?

Healthcare premiums are expensive. Three times more expensive than they were 20 years ago. Small businesses are often subject to age-banding for healthcare premiums, which causes prices to vary by age group

Utilizing a professional employer organization allows employees from different companies to be grouped together, driving down healthcare prices and eliminating age-banding from your list of healthcare difficulties.

Not only do PEOs lower healthcare premiums, but they allow small to midsize companies access to the same benefits and perks that large companies offer. These include multiple 401K plan options, ancillary, PTO, and more.

By grouping employees together with a PEO, compliance is streamlined and protected. By giving companies and employees access to HR professionals and insurance, utilizing a PEO minimizes compliance risk. 

The proof is in the numbers. Small businesses that use a PEO have a 10-14 percent lower turnover rate, grow 7-9 percent faster, and are 50 percent less likely to go out of business than those who don’t.

Myths Surrounding Professional Employer Organizations

The number one myth surrounding PEOs is that co-employment is risky. Some may mistakenly view co-employment as handing over your business control to someone else.

When utilizing a PEO, your business administration is still in your hands, including operations, employee direction, hiring, firing, employee advancement, and more.

Regulatory compliance as well as hiring and firing processing is a shared duty between the PEO and your company, but utilizing a professional employer organization simply takes HR, payroll, and benefits administration off of your hands. Control is gained over your business and employees ⁠— not lost.

Another myth surrounding PEOs is that utilizing a professional employer organization is the same as employee leasing ⁠— it is not. Your employees are still your employees, they are simply being paid and utilizing benefits through the PEO’s system.

Why Choose guHRoo For Your PEO?

Using guHRoo’s PEO services gives you access to a benefits package you can be proud of when recruiting new talent. guHRoo offers a fully comprehensive offering including the BlueChoice Health Plan a premier carrier⁠ – 401K plans through Transamerica that integrate seamlessly with payroll, workers’ compensation plans, life insurance, and more. The best part is, it’s all in one place and handled by the experts, saving you time, money, and mitigating stress.


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