Is a PEO the same as a Staffing Agency?

October 30, 2023

Houston is a hub of businesses and corporate employment. It offers every individual a chance to make their dreams come true. This gives a rise in need for HR solutions to cater to the needs of employers and as well as the employees.

Staffing agency vs. PEO ─ which is which? In Houston, TX PEO or also known as Professional Employer Organization are becoming prominent day-by-day. And so, is the staffing agencies. How do we know which of the two is best for our company and whether the two are different or same?

Here is what you need to know about PEO and staffing agency.

What does PEO mean?

PEO is the short form of Professional Employer Organization. Understand it this way: A PEO is a firm that provides comprehensive HR solutions for businesses. When an organization collaborates with a PEO, they enter into a co-employment arrangement.

This means that the PEO becomes the employer of record for certain HR and administrative functions, including payroll, benefits administration, and compliance. The client company retains control over its day-to-day operations and the work performed by its employees.

Moreover, for businesses in Houston, TX professional employer organizations are quite beneficial even if it is a small-scale business or a medium-sized enterprise.

What is a Staffing Agency?

Staffing agency may be similar in its operations with PEO, but it is quite distinct from it. It specializes in connecting businesses with temporary or permanent employees. Staffing agencies have a pool of employees having various skillset who come from different backgrounds.

Therefore, these agencies help these individuals to get inducted in companies and organizations that well-meet their expertise and qualifications. To understand staffing agencies better, consider them as intermediaries who match job seekers with employers based on their specific requirements.

Key Points of Difference

Although, similar when it comes to the dynamics of the employment solution, flexibility and HR expertise, PEO and staffing agencies differ in ways such as the extent of engagement within the operations, lapse of time and HR services. This list includes and is not limited to the following.

  1. PEOs often provide access to cost-effective employee benefits through their larger client pool. Staffing agencies do not typically offer benefits to placed employees.
  2. In a PEO arrangement, employees are technically co-employed by both the client company and the PEO. In contrast, staffing agency employees are solely employed by the client company.
  3. PEOs involve in co-employment, sharing responsibilities for HR functions with the client company. However, staffing agencies, facilitate temporary or permanent hires.
  4. PEOs offer a wide range of HR services, including payroll, benefits administration, compliance, and risk management. Staffing agencies primarily focus on recruitment and placement.
  5. PEOs are typically engaged in long-term relationships with their clients, whereas staffing agencies often deal with short-term staffing needs.

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The Verdict!

Whether you choose PEO or a staffing agency, it is only beneficial for your business to find the right firm that is known for providing with just the exceptional HR solutions in Houston, TX. Let experts at Elevation HR be the ones to handle it for you. Dial (281) 353 – 8847 to connect with them today.

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