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The Best PEO Service Providers of 2024

Updated Feb 21, 2024
Best Industry Expertise
  • Flexible per-employee pricing
  • Industry-specific expert support
  • Extensive benefits options
  • Flexible per-employee pricing
  • Industry-specific expert support
  • Extensive benefits options
Best for International Payroll
  • Payroll support in 100+ countries
  • Automated contractor payments
  • Intuitive payroll technology
  • Payroll support in 100+ countries
  • Automated contractor payments
  • Intuitive payroll technology
Best for Risk Management
  • Robust expert support
  • ESAC and IRS certified
  • Workplace safety guidance
  • Robust expert support
  • ESAC and IRS certified
  • Workplace safety guidance
Best for Onboarding
  • Flexible plan options
  • Paperless onboarding
  • 24/7 Customer Support
  • Flexible plan options
  • Paperless onboarding
  • 24/7 Customer Support
Best for Growing Businesses
Rippling PEO
Rippling company logo
  • Flexible and scalable plans
  • Intuitive tech platform
  • Multistate compliance
  • Flexible and scalable plans
  • Intuitive tech platform
  • Multistate compliance

Table of Contents

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What is a PEO Service?

A PEO service stands for “Professional Employer Organization,” and refers to third-party PEO companies that manage human resources functions for small businesses, including payroll processing and benefits administration. PEO services can also manage the onboarding of your new hires, taking the administrative burden off your company while ensuring all the appropriate paperwork and training is completed. PEO companies also offer extensive reporting to ensure regulatory compliance with all state and federal regulations.

PEO services are human resources solutions for small and midsize businesses that don’t have internal HR staff. A PEO company takes the place of an internal HR department by handling your payroll, employee benefits and other HR-related needs. PEO services can also be excellent resources for small businesses expanding into different states or countries that need help juggling different laws and compliance issues.

When selecting a PEO company for your business, you have several factors and many services to consider. Some PEO services are geared towards international business or certain industries, while others excel in specific areas of HR such as benefits or onboarding. To make the process easier, we’ve chosen the PEO companies we think are best for various use cases and business types.

Compare Our Best Picks

BND Ribbon
Our Top Picks for 2024
TriNet PEO
Insperity PEO Services
Paychex PEO
Rippling PEO
Justworks
ADP TotalSource
Papaya Global PEO
AlphaStaff
Rating9.7/109.4/109.1/109.4/109.5/109.6/109.1/109.2/108.6/10
Best Use Case

Best for Industry Expertise

Best for International Payroll

Best for Risk Management

Best for Onboarding

Best for Growing Businesses

Best for Startups

Best for Benefits

Best for International Compliance

Best for Recruiting

Certifications

IRS, ESAC

N/A

IRS, ESAC

IRS, ESAC

N/A

IRS, ESAC

IRS, ESAC

N/A

ESAC

Pricing

Custom pricing

Employer of record services starting at $599 per month

Custom pricing

Custom pricing

Custom pricing

$49-$99 per employee per month

Custom pricing

A la carte pricing. Payroll support starts at $20 per employee per month

Custom pricing

Employee Minimum

5

N/A

5

5

5

2

5

1

N/A

Customer Service

Phone, email, live chat, dedicated specialists

Live chat, dedicated agent

Phone, email, live chat, dedicated specialists

Phone, email, live chat

Phone, email, live chat

Phone, email, live chat, dedicated account manager

Phone, email, live chat, dedicated specialists

Phone, email, live chat

Phone, email

24/7 Support Available

No

Yes

No

Yes

No

Yes

No

No

No

Mobile App

Yes

Web app only

Yes

Yes

Yes

Yes

Yes

Yes

No

Review Link
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Our Reviews

TriNet PEO: PEO with the Best Industry Expertise

  • TriNet customers have access to industry experts for HR and compliance support.
  • TriNet offers impressive benefits from top health plans and providers.
  • Businesses in certain high-risk industries may not be eligible for PEO service through TriNet.
Editor's Rating: 9.7/10
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TriNet offers industry-specific service plans and support offerings that can be tailored to your industry and specific circumstances. TriNet’s specialized experts can provide hands-on guidance navigating relevant compliance matters and industry challenges, in addition to general HR concerns like benefits and payroll.

Of all the PEOs we reviewed, TriNet was one of only two to offer industry-specific tools and guidance. TriNet has customer support teams with expertise in your industry and provides the most comprehensive industry-specific support features. This is a valuable resource for business owners who need help navigating the issues and regulations that are unique to their industry. TriNet even offers tools for highly regulated industries, such as financial services or healthcare.

TriNet’s team of HR and industry-specific experts can guide employers through changing industry regulations and provide guidance on unique competitive challenges relevant to specific industries such as supply issues. Employers in highly competitive or heavily regulated fields are likely to benefit from TriNet’s unique industry expertise.

Deel: Best PEO for International Payroll

  • Deel supports international payroll and HR in over 100 countries.
  • Customers have access to 24/7 chat support.
  • Immigration support is more limited than some other international PEOs.
Editor's Rating: 9.4/10
Visit Site

While many PEO services that we reviewed treat international payments as an add-on or second thought, Deel puts international payroll at its core. The service offers flexible payment options for international employees and contractors along with intuitive payroll technology. Deel can run payroll in over 100 countries currently and handles local tax and payroll compliance.

Deel employs in-house payroll experts in local jurisdictions across the globe to provide detailed local expertise on payroll matters. These experts can advise on managing payments, expense reimbursements, navigating local payroll or PTO compliance, and more. You can also use the Slack integration to access Deel AI for immediate responses regarding compliance details or global workforce data. With Deel’s Compliance Hub, employers can easily view an ongoing newsfeed of regulatory changes as they occur, and receive reports that flag potential compliance issues like worker misclassification or minimum wage violations. Companies can also access 24/7 chat support to quickly resolve payroll questions or concerns.

Registering in new countries and complying with different payroll and tax laws across different regions can be a complex process for small businesses, but Deel can reduce the costs and paperwork associated with expanding internationally. Deel is able to get businesses up and running with international payroll fairly quickly, and customers noted that the company provides an easy payroll set-up process.

Insperity PEO Services: Best PEO for Risk Management

  • Insperity offers advanced compliance and risk mitigation tools, including support from compliance and safety experts.
  • Employees can access a large library of training and development resources from Insperity.
  • There is a 5-employee minimum to enroll with Insperity PEO.
Editor's Rating: 9.1/10
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Insperity provides flexible coverage and comprehensive PEO service options to small businesses that want to mitigate risks. Businesses that partner with Insperity have access to more than compliant training resources, payroll processing support, ACA-compliant benefits administration and workplace safety experts. Insperity can help you analyze and overhaul various business processes to make your company more efficient and reduce compliance risks.

Insperity is also proactive about alerting businesses to any changes in employment law. Keeping track of changing laws and requirements can be hard for business owners, and it’s easy to miss an update and make a compliance mistake. Insperity doesn’t wait for employers to have questions; instead, the PEO reaches out to the employer when changes occur. Insperity can provide training to supervisors on new compliance matters and help businesses update their written employee policies to reflect the new requirements.

Since Insperity is accredited by the Employer Services Assurance Corporation (ESAC), Better Business Bureau (BBB) and the IRS,you can rest assured that you are partnering with a reputable platform. Many of the PEOs we reviewed have these accreditations, but this shouldn’t devalue their importance. These accreditations are reviewed regularly to ensure the company still provides exemplary service. Insperity is one of the few companies we reviewed that has earned accreditation from all three major PEO-accrediting agencies, which evaluate PEOs on a rigorous set of guidelines.

Paychex PEO: Best PEO for Onboarding

  • Paychex offers a paperless, mobile-friendly onboarding experience.
  • Paychex offers customizable plans with flexible terms.
  • Companies must have a minimum of five employees to enroll in Paychex PEO services.
Editor's Rating: 9.4/10
Visit Site

Paychex is a professional employer organization with strong digital onboarding and employee self-service tools. Paychex PEO includes personalized payroll, benefits and onboarding support from Paychex’s HR experts and mobile-friendly, cloud-based HR software tools. Paychex’s seamless digital onboarding experience – complete with editable online forms and e-signature capabilities – makes it an excellent option for employers onboarding remote team members or simply looking to provide a more seamless onboarding experience.

A strong onboarding experience is the key to making a positive first impression with new hires. Paychex recently revamped its employee onboarding tools to deliver a more seamless onboarding experience. New hires receive an invitation to the platform and can access a well-organized onboarding list where they may complete paperwork and set up their payroll information including selecting their withholdings and enrolling in direct deposit. Employees can even go through all of their onboarding paperwork from a mobile device. Onboarding tasks can also be tracked on the Paychex platform dashboard. Once employees are onboarded and ready for their first paycheck, they can use Paychex’s pre-check feature to preview their paystub before payday to ensure it’s correct and ready for processing.

Rippling PEO: Best PEO for Growing Businesses

Rippling PEO
Rippling company logo
  • Rippling is a scalable platform that can meet the needs of small businesses with employees in various cities and states.
  • If your business outgrows the PEO model, you can switch PEO services off and just use Rippling’s tech platform.
  • Rippling does not have ESAC or IRS accreditation.
Editor's Rating: 9.5/10

Rippling is a scalable PEO service that is well-suited for growing businesses thanks to its seamless recruiting and onboarding process, advanced multistate compliance tools and flexible tech platform. The company offers a scalable solution that businesses don’t need to worry about outgrowing. When the time comes to transition from a PEO model to an in-house HR team, the transition between Rippling PEO and Rippling HR software is quick and seamless, something that we did not find in other PEOs that we reviewed.

Rippling excels at helping growing companies that operate in multiple locations. As small businesses continue to expand across a wide range of cities, states and even countries, it’s important to partner with a PEO that can directly support your needs on a national or global level. For example, keeping track of company-owned devices across various locations can be tricky, but with Rippling’s new computer inventory management offering, the service can manage your devices as needed (e.g., assigning, setting up, wiping and storing devices).

While many PEOs have intuitive tech platforms, Rippling’s recruitment and remote onboarding process is particularly user-friendly. We like that its automated applicant tracking platform allows you to quickly funnel top talent through the hiring process. Once a new worker is officially hired, adding them to the platform takes only a few minutes. When growing businesses need to add new locations or hire remotely, Rippling can handle local tax registration and configure different labor laws and minimum wages for employees across various states.

Justworks: Best PEO for Startups

Justworks
JustWorks company logo
  • Justworks offers 24/7 support through phone, email and live chat.
  • Customers with over 15 employees have access to a dedicated account manager for prompt, personalized care.
  • The Basic plan does not include employee benefits, such as health insurance.
Editor's Rating: 9.6/10

Justworks is a comprehensive PEO that gives startups access to corporate-level benefits, automated payroll services, compliance resources and HR tools in one easy-to-use platform. You can also add other useful features like Justworks Time Tracking (formerly Justworks Hours) to further streamline your process and reduce the need for manual HR management. Justworks customers have access to HR experts who can offer guidance and advice on employer responsibilities and HR concerns.

Justworks subscribers also get access to a dedicated account manager who offers prompt, personalized support. The average response time from Justworks account managers is two hours, which is faster than most PEOs we reviewed, particularly for email support. Startup founders and managers will likely run into more questions than leaders in more stagnant, long-running companies, so the combination of dedicated support and 24/7 service options can be incredibly beneficial.

Justworks also offers a tech-forward platform with a more updated, intuitive design compared to other PEO providers that we reviewed. This technology aligns well with the current startup culture and also provides a low-learning curve for managers and startup founders that may be new to HR and PEO platforms.

ADP TotalSource: Best PEO for Benefits

  • ADP offers robust benefits offerings from top benefits providers.
  • Customers can receive hands-on support from benefits experts.
  • The company does not list pricing on their website, so you will need to contact sales for a custom quote.
Editor's Rating: 9.1/10
Visit Site

Most PEOs provide benefits support, but ADP’s benefits tools stand out from the crowd. ADP offers several plans, including custom plans that can meet the needs of your employees. Working with ADP is a great way for smaller businesses to provide high-level benefits that would not typically be available to them.

With its API-driven technology, ADP can speed up your benefits administration process and improve accuracy by automatically syncing data between the platform and benefit carriers. Because the system updates in real time, employees can seamlessly configure their benefits and view live updates as changes are made. ADP’s ability to help organizations of any size deftly manage complex benefit offerings, along with its tried-and-true services and platform, make it one of the strongest, most comprehensive PEOs on our list.

ADP also provides customers with a team of HR experts who can offer personalized support in different areas, including benefits administration, recruiting, payroll, compliance and workplace safety. This ongoing guidance is helpful as businesses grow and want to continuously expand and adjust their benefits offerings to remain competitive as an employer.

Papaya Global: Best PEO for International Compliance

Papaya Global
Papaya Global logo
  • Papaya Global can provide onboarding, payroll and benefits support in 160+ countries.
  • Business owners can access a wealth of payroll and HR data insights and visualizations.
  • Papaya Global is more expensive than the domestic PEOs we reviewed.
Editor's Rating: 9.2/10

Papaya Global is an international PEO that offers full-fledged PEO services to small and midsize businesses. Its compliance and HR features are already exemplary, but it goes above and beyond by providing these services internationally. Because of Papaya Global’s flexible service and compliance expertise across 160+ countries, it earns our pick as the best PEO for international compliance.

One of the biggest benefits of working with an international PEO is compliance support. Staying on top of all of the regulations, paperwork and compliance requirements is already a struggle for employers, but those challenges multiply when businesses operate internationally. Papaya Global makes it easier to stay compliant by connecting businesses with compliance experts who know the requirements for each country in which they operate.

Compliance tools are built into Papaya Global’s tech platform to help automate compliance processes. The company’s global compliance engine ensures that country-specific payroll and labor laws are up to date and strictly followed. Papaya Global also conducts a compliance check before processing payroll. Employers can automatically process payroll payments directly through the Papaya platform, with payments reaching employees within just 72 hours.

AlphaStaff: Best PEO for Recruiting

AlphaStaff
AlphaStaff logo
  • AlphaStaff customers can receive expert hiring guidance and recruiting support.
  • AlphaStaff is an ESAC-accredited PEO.
  • The user interface appears slightly outdated.
Editor's Rating: 8.6/10

AlphaStaff is a PEO service that provides full service recruiting support along with traditional PEO hiring services such as onboarding support, hiring guidance and compliance expertise. Many PEO providers provide limited recruiting capabilities, but AlphaStaff provides an expansive range of technology and expert recruiting support to help employers find the right hire.

The AlphaStaff platform includes the user-friendly AlphaStaff Hiring applicant tracking system. This system can be used to post jobs, add screening questions, review applicants, schedule interviews, and onboard new hires. Employers can leave notes and track the status of applicants with the included ATS tools. These tools make it easier for small businesses to create a streamlined, efficient hiring and onboarding process.

AlphaStaff employs professional recruiters with extensive training and recruiting industry knowledge to help small businesses find the best hire for their needs. Businesses that use AlphaStaff’s recruiting team also receive a 90-day replacement guarantee, which means any candidate terminated within the first 90 days will be replaced with no added cost to the employer.

What Is a Professional Employer Organization?

A professional employer organization, or PEO, is an HR service that operates through a co-employment model, which means your employees are on the PEO’s books but still fall under your management. PEOs manage functions like payroll, HR administration, employee benefits, risk management and regulatory compliance, workers’ compensation, and employee training and development for their client businesses. When you choose a PEO, make sure it can perform all of the HR functions you need and can scale with your business as it grows.

It is important to find a trustworthy and certified PEO, since the service will be deeply integrated with your company. PEOs can earn certain certifications and accreditations to demonstrate that they abide by best practices, meet strict financial guidelines, and comply with all employment laws and regulations. The ESAC, IRS and BBB all have accreditation programs for qualifying PEOs.

PEO Costs

PEOs use two main pricing structures for small businesses: per-employee fees and percentages of total monthly payroll. These costs range from $40 to $160 per person, or from 3 to 12 percent of your monthly payroll, depending on the company and plan you choose.

You should also consider the contract lengths. Some PEOs offer short-term contracts, while others lock you into multi year deals. Here are some other important factors that affect the cost of your PEO service.

Plan Structure

Find the plan with the services that fit your business’s needs. For instance, some plans include employee onboarding, workers’ compensation support, payroll processing, and risk and compliance management. PEOs can offer one-size-fits-all solutions or tailored solutions based either on your industry or your company’s size.

Additional Fees

Throughout the research and sign-up process, be on the lookout for any additional fees you’ll have to pay. Many PEOs don’t mention additional fees until it’s time to sign the paperwork. Before you sign up, request a detailed breakdown of all pricing and fees in writing, and review line by line where your money will go. If a PEO service is not willing to provide this information, consider it a red flag.

TipTip

PEOs provide not only payroll processing and HR support but also benefits administration. Keep in mind that a PEO service’s fees do not include the actual cost of the benefits you provide your employees. The cost of benefits administration is usually added to your monthly or yearly fee.

Employee Minimums

Some PEOs require you to have a certain number of employees in order to use their services. This minimum is usually five employees. For many businesses, this is a nonissue, but if you run a very small or new company, your options for PEO support will be limited. Other PEOs may

PEO Features

While PEO service offerings vary and individual providers may specialize or stand out in specific areas of HR, these are the key features that you will typically find in a well-rounded PEO service.

HR administrationPEOs can help small businesses offload day-to-day administrative HR duties such as managing employee paperwork.
Payroll processingPEOs provide digital payroll processing tools and expert guidance from payroll experts.
Risk and compliancePEOs often provide risk management tools built into their tech platforms alongside expert compliance support.
Employee benefitsWorking with a PEO is a great way for companies to offer Fortune 500-level benefits not typically accessible to small businesses.
Workplace training and employee developmentDevelop your workforce through performance management tools, online training, and expert guidance from PEO providers.

HR Administration

The primary function of a PEO is to take care of human resources so that business owners can focus on other duties. PEOs can provide as much or as little HR assistance as you need. They can manage HR tasks such as employee handbook and policy creation, employee onboarding and termination, unemployment assistance, and compliance reporting. Their features are typically accessible through intuitive online platforms and mobile-friendly applications. PEO platforms make it easy to access all of your HR functions in one place.

Payroll Processing

One major function of most PEOs is payroll processing. Since your employees are on the PEO’s books, the PEO tracks their time and attendance, including hours worked, paid time off, sick time and vacation days. The PEO not only tracks employee time and attendance but also helps to prepare and issue their paychecks. It can also process employee liens and garnishments if necessary.

Many PEOs also manage and report your quarterly and year-end state and federal deposits and filings. A PEO taking care of your payroll can save you a lot of time and money. A reputable PEO will always pay your employees accurately and on time, which could improve your company culture if payroll has been hard to manage in-house.

Risk and Compliance

PEOs are usually well versed in the laws and regulations that your company has to follow, so they can help you manage risk and legal compliance for your business. This service is especially beneficial if you operate in multiple states or regions with varying employment laws. PEOs can help your business comply with the Affordable Care Act (ACA), the Health Insurance Portability and Accountability Act (HIPAA), and the Occupational Safety and Health Administration (OSHA). In some cases, they can conduct employee accident investigations and perform onsite safety inspections and job hazard analysis.

Employee Benefits

Since PEOs have so many employees on their books, they have access to affordable, desirable employee benefits, including medical, dental, vision and life insurance. Some even offer health savings accounts, flexible spending accounts and health reimbursement arrangements. They often provide long- and short-term disability insurance, employee assistance programs, and retirement options like 401(k) plans. Many PEOs offer a wide selection of fringe benefits too, such as commuter reimbursement programs and parking discounts.

Did You Know?Did you know

Some PEOs also help educate your employees about their benefits, whether that’s deciding between an HSA vs. FSA, allocating retirement funds, or choosing healthcare benefits.

Workplace Training and Employee Development

Most PEOs offer standard workplace training on topics like sexual harassment and discrimination. Many of them provide additional onsite and virtual training on leadership, communication, workplace technology, recruitment, disciplinary actions and social media. Some even offer industry-specific training. This access to employee training and development materials can help your team grow and advance their skills. PEOs that offer training and development often have an online platform to track and report employee course results.

Choosing a PEO

Finding a PEO is not as difficult as you may think. The first step of any business purchase decision is to assess your business’s needs so you can find companies that can help you solve those problems. Once you compare your top choices’ pricing, features and contracts, you should be able to decide which one is best for your business.

We interviewed some small business owners and managers to better understand what the decision process is like for SMBs interested in partnering with a PEO. While your buying decisions will be unique to your company’s needs, here are a few basic steps to finding the right PEO for your company.

1. Reviewing the Technology

When Max Prokell, founder of Venta Marketing, was choosing a PEO for his marketing team of 15 employees, he looked for one with a seamless user experience and dedicated HR support.

“The first sign of a great PEO comes down to their technology and the implementation of a great user experience,” he said. “Any PEO could have the most advanced platform on the market, but if my employees hate the interface, then the technology loses its value. We selected [TriNet] because I knew that my employees would appreciate their technology and a mobile-first approach to HR services.”

2. Researching User Experience

Read customer reviews to find out more about the experience of current customers. This is an important step because PEOs are much more than a software service — they are your co-employer. You can demo the software, but to get a clear picture of whether they’ll be a good partner for your business and employees, you’ll want to dive into customer reviews.

Aaron Bailey, CEO of Inbox Insight and former COO of business.com, placed high importance on user experience and customer support. When he needed a PEO for his team of 80 employees, he chose Insperity.

Insperity’s “user experience was better than its competitors’, the training and development options were very good, and their mobile app was very easy to use and had frequent improvements to it,” Bailey said.

3. Considering Your Business’s Industry

Since every small business is unique, a PEO should be able to customize its HR features to fit your needs. Some PEOs specialize in certain industries or business sizes, which can be beneficial for companies that don’t want a standard one-size-fits-all PEO approach.

Anh Trinh, founder of media startup GeekWithLaptop, said he selected Oasis for his team of eight employees because it is a reliable PEO that specializes in small businesses and startups. Trinh’s parting advice to his fellow small business owners is to identify the PEO features your business needs first and choose a PEO specializing in those areas.

4. Reviewing Accreditations and Narrowing Down Your Options

Check with the major accreditation agencies when you’re considering PEOs. While PEO companies do not need accreditation to provide good service, the credential is a good way to help you narrow down your options if you have several contenders. Accreditation will verify some major aspects of the PEO’s overall service offering.

A few of our best picks aren’t accredited but still provide great service, so your decision depends on what you value as a business owner.

5. Obtaining Pricing Quotes

One challenge that comes with shopping for PEO services is that many of the top providers do not provide transparent, publicly available pricing information. Therefore, once you’ve narrowed down your options a bit, you’ll need to request custom quotes from the PEO vendors that you are considering.

6. Choosing Your PEO

Once you’re armed with all the information on your candidates, choose the PEO that best meets your company’s needs. After you determine the plan and features your company will best benefit from, discuss any additional costs or fees with your chosen PEO’s sales representatives before you commit.

Advantages of PEOs

Working with a PEO can offer a number of key benefits for small businesses, particularly when the business is not yet ready to hire internal HR and payroll staff. Explore the main advantage of working with a PEO below.

Access to Better Benefits

One significant benefit is that you can offer affordable health insurance benefits to your employees that you might not be able to access otherwise. Most PEOs technically have thousands of employees, so they can negotiate discounted rates. Similarly, PEOs can offer your employees disability and life insurance plans, retirement plans, transportation reimbursement, and other fringe benefits they may want. Competitive benefits like these make you more desirable as an employer so you can attract and retain top talent.

Offloading Administrative Tasks

Another appealing quality of PEOs is their reputable administrative services, which are particularly helpful for small business owners who already wear many hats and don’t have time for all the necessary paperwork. Since PEOs are experienced in managing HR and administrative tasks, you’re free to focus on other aspects of your business and rest assured that your employees are properly managed and supported.

Expert Compliance Support

Navigating business laws, regulations and other compliance issues requires expertise that many business owners, particularly new startup founders do not possess. A small compliance mistake can have big repercussions. Partnering with a PEO allows businesses to work with compliance experts who stay up-to-date on all of the changing employment and payroll laws and requirements to avoid any costly mishaps.

Key TakeawayKey takeaway

The National Association of Professional Employer Organizations (NAPEO) found that SMBs grow at a faster rate and are half as likely to go out of business if they partner with a PEO.

Support with Domestic and International Expansions

Global expansion is no longer reserved for large enterprise businesses. Many small businesses hire across multiple states or even multiple countries to find talent that best fits their needs. PEOs can help small businesses register in new states or countries and manage local compliance and payroll requirements. International PEOs can also help with immigration and visa processes if needed.

Access to Comprehensive HR Technology

PEO services also provide access to the provider’s HR technology platform. This typically includes the key tools that you would expect to find in an HR software service, including reporting tools. Many PEO tech platforms include performance management tools, digital onboarding workflows and document management capabilities. Some PEO platforms are more tech-forward than others, but all of the services that we reviewed offered some HR technology tools to PEO customers.

PEO Trends in 2024

The PEO industry has experienced a high level of growth in recent years, and it does not appear to be slowing down in 2024. The PEO industry was valued at $59.62 billion in 2022 and is expected to reach a valuation of over $152 billion by 2031. With a compounded annual growth rate (CAGR) of 11 percent, the industry is projected to grow quite significantly each year until at least 2031.

One trend we’ve already seen in 2023 is the expansion of international capabilities among standard PEO providers. International PEO solutions such as Deel and Papaya Global continue to provide robust international PEO services, but even domestic players like Rippling and Gusto are expanding international payment support within their HR software and PEO services.

Another trend that we believe will continue is the use of artificial intelligence (AI) in HR management. AI quickly became a hot topic in 2023, and as technology evolves, we can expect to see it used in more HR platforms, like PEOs, to help further automate many HR functions for companies.

PEO FAQs

Small to midsize businesses in nearly any industry can benefit from partnering with a PEO. PEOs tend to be most helpful for businesses that do not have internal HR departments, which renders these organizations unnecessary for many larger businesses. Businesses looking to expand globally often need PEOs to manage international HR as well.

The best PEO service providers manage and maintain as many or as few HR functions as you need, including HR administration, payroll processing, workers’ compensation, employee benefits management, risk and compliance management, or training and development.

PEOs are experts in legal compliance for your state and industry, so they can reduce your company’s risk of lawsuits. Many PEOs provide online portals that allow employers and employees to access their benefits and HR self-service easily, but the best companies also offer mobile apps and one-on-one customer service. The best PEOs also tend to be accredited by the ESAC, IRS and BBB.

There are a few potential downsides to consider before you employ a PEO service. For example, since a PEO acts as a co-employer over your staff, it could become an outside influence on your company culture. Some business owners want to maintain control over their organization’s culture without the involvement of a co-employer.

Another potential negative is a perceived lack of security. When a PEO manages your payroll and taxes, it has access to sensitive company information and employees’ personal data. This makes some employers or their staff uneasy about security. The best PEOs implement strict security measures, so it is important to partner with a reputable, accredited company.

The biggest difference between PEOs and administrative services organizations (ASOs) is that PEOs operate under a co-employment relationship and ASOs do not. ASOs tend to be more flexible than PEOs as well; a business can partner with an ASO to receive assistance with as few or as many HR services as they need, whereas PEOs typically provide bundled HR services.

Since ASOs do not operate under a co-employment model, they don’t provide employee benefits or workers’ compensation coverage. However, they can put you in touch with brokers for those services.

The most significant difference between a PEO and an HR outsourcing (HRO) service is that a PEO operates under a co-employment relationship, and an HRO does not. Additionally, PEOs are typically a one-stop shop, meaning they bundle all their services together as one offering. Conversely, HROs tend to offer you the flexibility to choose which specific services you want to outsource.

As a result, PEOs are geared towards smaller businesses that need comprehensive HR assistance, and HROs are better for larger organizations or businesses that only need to outsource one (or many) HR services.

Implementing a PEO service in your business takes three to six weeks, with an average transition time of four weeks (which starts at the beginning of your payroll cycle). During the implementation process, the PEO works with your company to ensure it has all the proper employment details for each team member.

PEOs can help small businesses manage a variety of HR functions, including recruitment. Instead of wading through stacks of job applications, you can lean on your PEO throughout the process. PEOs employ knowledgeable HR professionals with the necessary experience and resources to find and recruit top talent for your company.

They also understand the current employment and labor laws that impact recruitment and hiring, so you can rest easy knowing that your business will maintain legal compliance throughout the process. Additionally, since you’ll gain access to great employee benefits with PEOs, you can promote comprehensive benefits packages to attract top talent.

Kaylyn McKenna
Business Operations Insider and Senior Analyst
Kaylyn McKenna is a freelance writer specializing in business, tech, and leadership. She received her MA in Industrial-Organizational Psychology from Touro University, and enjoys using her industrial psychology background to share management, HR, and organizational effectiveness tips with small business owners. She has covered topics related to business law, compliance, employee retention, company culture, and management strategies.
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