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PEO Myths and Misconceptions

PEO Myths and MisconceptionsPEO Myths and Misconceptions

Countless organizations have long been dependent on professional employer organizations (PEOs) to relieve them from the stress and burden of handling human resources management and benefits administration for their employees. PEOs offer these businesses invaluable knowledge and expertise to boost their operations' efficiency and overall productivity.

However, many misconceptions and myths still linger regarding PEOs that discourage business owners from investing in them when their businesses could highly benefit from their services. A full consultation with high-grade PEOs can answer any question and remove any doubts you may have, but if you are hesitant to contact one, or you are not sure which PEOs you should contact, we will present you with our top three recommendations for the best PEOs in the industry after we debunk the most common misconceptions regarding them.

PEO Myths and Misconceptions

1. PEOs will replace my HR staff

Outsourcing HR functions to a PEO will not, by any means, cause staff cuts in your business. In fact, the PEO you decide to work with will connect your team with their own team of dedicated experts that will work closely with them to enhance their abilities and widen their knowledge.

Since most small to medium-sized businesses do not have a full-service HR department, an office manager or HR generalist is usually allocated to perform most internal HR functions. Such individuals could not be very familiar with laws and regulations regarding employment, so they could highly benefit from the expertise and knowledge the PEO team will provide them with.

The same goes for payroll administration and your accountants; if your business only has one person who processes payroll for the entire company, their chances of making calculation errors, tax misfiling, or late payments are high, which causes your business costly fines, dissatisfied employees. A PEO will work closely with your payroll-assigned person, extend their experience and expertise, and offer a technological solution to simplify and streamline all payroll processes.

2. All PEOs are the same

This is one of the most harmful misconceptions about PEOs. As a business owner, you should look for the most reputable PEO that can transform your business and exceed your expectations. The most distinctive merit a PEO can have is the Employer Services Assurance Corporation (ESAC) accreditation.

ESAC accreditation is the gold standard in the industry and the badge of trust as it demonstrates the PEO is financially stable, conducts ethical business, and adheres to operational standards and regulatory requirements.

With over 700 PEOs in the United States, less than 5% have earned their ESAC accreditation, proving that not all PEOs are the same or offer the same level of high-quality services and guidance.

3. My business is too small for a PEO

Small businesses that partner with PEOs can actually benefit the most as no business is too small to work with a PEO. A survey conducted by the National Association of Professional Employer Organizations (NAPEO) states that the average PEO client has about 23 employees.

PEOs' services can offer small businesses great benefits, as they would not have the resources or full-service departments that can efficiently perform their operations or have the knowledge of all laws and regulations that come with their roles. Besides HR functions and payroll processing, PEOs can offer small businesses benefits access, tax filing and management, paid leave management, and much more.

A PEO for your small company can highly boost its chances of survival in the industry and help it grow to reach its fullest potential.

4. My employees will not like the change

Change for anyone can be scary, and many employers and employees fear the change that PEOs can bring to their business. But as soon as they receive all the services and benefits that PEOs offer, they will surely embrace these positive changes.

The best PEOs are also partnered with most of the top insurance carriers, which allows them to offer small business employees access to Fortune 500-level benefits; these include health insurance, vision and dental, retirement programs, tuition reimbursement, paid time off, and much more, at a relatively lower price of what they would pay independently.

These are only some of the misconceptions that go around PEOs, but now you know better. If you are curious about any of our recommended PEOs, we advise you to request a consultation, so they can answer every question you have.

Below you will find our top three PEO recommendations for the best in the industry.

Top PEO Recommendations

1. Paychex

For our top recommendation, we recommend you consider Paychex. Paychex offers the most comprehensive payroll software in the market, but it also offers unbeatable high-grade PEO services.

When you work with Paychex as your PEO partner, they will assign you a team of dedicated professionals that will provide you with the following services:

  • Payroll Processing
  • Employee Benefits and Administration
  • HR Services
  • Time and Attendance
  • Business Insurance
  • Learning Management System and Training
  • Risk Management
  • Employee Performance Management

Paychex will associate its payroll software with its PEO services to help you boost your business operations and provide it with a robust technological solution that will meet its needs. Paychex does not advertise any prices for its PEO services but does advertise subscription plans for its payroll software, and they are:

Paychex Flex Essentials - $39/month, + $5 per employee

Paychex Flex Select – Quote-based

Paychex Flex Pro – Quote-based

Read our full Paychex PEO review to know more about its services.


Our second recommendation for one of the best PEO companies goes to BBSI. BBSI is ESAC accredited and will provide you with comprehensive services that will definitely transform your business. One of BBSI's featured services is the pay-as-you-go workers' compensation model that it offers its clients, which proves to be quite favorable for small businesses.

BBSI's main offered services are the following:

  • Business Strategy Development
  • Human Resources
  • Payroll Administration
  • Retirement Benefits
  • Risk and Safety
  • Staffing and Recruiting
  • Technology Solutions
  • Workers' Compensation

As for its prices, you will need to contact BBSI's team by phone at 1-800-494-5669 or fill out a form on their website so they can customize a unique quote for your business that depends on its needs and size.

Read our full BBSI review to know more about its employee-leasing services.

3. Justworks

For our last recommendation for one of the best PEOs, we present you with Justworks. Justworks is also accredited by the Employer Services Assurance Corporation (ESAC) and provides an entrusted variety of services. Some of which include the following:

  • Hiring and onboarding for remote teams
  • Automation and employee self-service
  • Payroll and taxes
  • Benefits administration
  • Software integrations
  • Contractor payment
  • Employment Practices Liability Insurance

Justworks bundles its payroll software with its PEO plans and tailors its pricing depending on your number of employees. Its plans for 25-99 employees are the following:

Basic plan: starts at $44/month/employee

This plan comes with Payroll services, Benefits, HR tools, and Compliance.

Plus plan: starts at $89/month/employee

This plan packs everything in the Basic plan, plus access to Medical, Dental, and Vision health insurance plans.

Read our full Justworks PEO review to know everything it can offer your business.

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