What Is A Peo?

December 15, 2023

PEO stands for professional employer organization. It is a corporate company or agency that is hired to provide HR solutions to small and medium scale businesses. Houston remaining to be the hub for business activities, PEO in Houston TX remains to be an un-stifled and ever-expanding concept dedicated to serving the needs of business related to human resource,
PEO’s are regarded as a third-party arrangement or agency that extends their HR services on behalf of an already established company. The main goal of hiring PEO services is to handle supplementary tasks while allowing businesses to increase efficiency and focus within the business itself. Some of the many PEO services include:

  • Payroll and tax administration
  • Employee training and development trainings
  • Recruitment drives and orientations for newcomers
  • Creating policies and ensuring workplace safety
  • Administrative help involving day-to-day planning
  • Compliance and risk management

Three Types of PEO

In this blog we will explain the three main types of PEO’s – co-employers, professional employer organizations and staffing companies.


The idea of giving complete power in the hands of an HR outsource company might not settle with everyone. In order to maintain a status and hierarchical sensibility, co-employers are usually the organization’s go-to choice.
Co-employers are appointed as employees within a business who support HR activities from hiring, maintaining payroll, firing, calculating commissions, orientations and training. Co-employers are mediatory individuals who are appointed as employees to the client but employer to the existing workforce. In other words, they are the employer(s) of record. Payment method for co-employer/s is monthly.

Professional Employer Organization

This type of PEO providing HR services does not become the employer of record. This means that the client company stays responsible for hiring, payroll and firing. While other HR related activities are taken up by this third-party service provider.
This model is suitable for business owners who want to retain first hand control over their appointed employees but also are looking to share responsibility when it comes to other aspects of HR. This is a rather expensive HR solution where most work still falls under the client’s spectrum.

Staffing Companies

A staffing company is a type of PEO that provides flexibility in services. They are not registered employees of records and work on contractual provisions.
In this particular type, the right of adding and deducting employers as per need is open.

Choosing the Right PEO For Your Business

In light of the geographical vastness of Houston TX, there are a hundred PEO’s to choose from that not only fit right with budget, practical services but also reflect a similar sense of value.
Now that we have a brief understanding on three types of PEO’S, listed are some factors that can provide a clearer understanding in order to choose the right service type for your business.

  • It is important to self-reflect in order to streamline your goals and objectives. Questions such as – What HR services do I need? How much is my budget? How much power and control I want to transfer to a third-party.
  • Research thoroughly and find which option suits you the best. In terms of expertise, experience, service areas and scale of business they’ve had worked with.
  • Before committing to a company, it is important to analyze your long-term goals and budget simultaneously. Can I afford to take and sustain the service?
  • Comparing prices and choosing the ones that provide great value for money among all PEO in Houston TX.
  • Once the search is over and you have found the right it – sign a contract and be sure to read through the terms and conditions carefully.
  • Self-evaluate your experience and see how the outsourcing agency has helped you do better and in what ways? Be sure about your decision – whether you want to renew your contract or switch in case of unmet goals.

Summing up

PEO in Houston TX is a popular concept among business people and enterprises. Not only does it help facilitate HR activities within a business setting but allows business people to increase work efficiency otherwise.
Direct your HR related queries to experts in the field – ElevationHR. Dial us at (281) 353-8847 today for a better HR performance in future.

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