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Finding the Best PEO for Small Business: Top 5 Picks

Finding the Best PEO for Small Business: Top 5 PicksFinding the Best PEO for Small Business: Top 5 Picks

Updated: October 10th, 2023

Running a small business efficiently while saving money is always a priority. In recent years, partnering with a Professional Employer Organization (PEO) has gained popularity as a valuable option. However, what exactly does a PEO entail, and how can they benefit your small business? Furthermore, which PEOs should you consider for your business? Let's dive into these questions.


What Is a PEO?

PEOs are businesses that handle payroll taxes and payments, employee perks, risk management, and workers' compensation. They function as co-employers, sharing the responsibilities of an employer while providing comprehensive HR support.

Businesses can concentrate on other crucial aspects of their operations while feeling safe in the knowledge that HR professionals are handling all of their administrative and HR needs, no matter how straightforward or challenging they may be. Even though HR services are what PEOs are mostly known for, some go one step further and offer other tech services like IT and accounting. 

Advantages of Using PEO for Small Business

How can PEOs benefit small businesses?

Many startup owners may believe that their company is too small to need or hire a PEO. That, however, is untrue. While PEOs offer their services to businesses of any size, small businesses can perhaps benefit the most for many reasons.

Due to the misconception that PEOs are too expensive, small businesses frequently disregard them. In fact, PEOs should be considered an investment for businesses, as they will save them lots of money in the long run and increase their profitability as their business operations get handled more professionally and efficiently.

When companies hire a PEO, the PEO will run the services on their behalf, which will lower their risk of liability and compliance violations. 

Using this HR outsourcing solution provides numerous advantages for small businesses, which can significantly impact their success and growth. Here are a few of the advantages:

  • Access to competitive benefit packages: They use their collective bargaining power to offer affordable, all-around employee benefits such as health insurance, life insurance, retirement plans, and more.  They also provide benefits administration, which can help attract and retain top talent in the job market according to the specific needs of each client company
  • Mitigation of employment-related risks: They are experts in HR solutions and help small businesses avoid mistakes that could cost a lot of money, like hiring the wrong person or breaking rules that could lead to big fines. They also make sure the workplace is safe for everyone, protecting workers from threats like sexual harassment
  • Scalable technology and infrastructure: These providers grant businesses access to advanced HR technology and infrastructure that may be financially out of reach independently. This technology streamlines HR processes and enhances data management. They can also include cutting-edge software for staff automation, such as mobile apps that make HR tasks easier, as well as live chat customer support
  • Employee-related cost stability: Collaborating with a PEO service provider can bring stability to employee-related costs, making budgeting more predictable and manageable for small businesses
  • Time savings: By outsourcing routine HR tasks to a PEO, business owners and managers can free up valuable time to concentrate on strategic, revenue-generating activities, ultimately increasing productivity and resource efficiency
  • Compliance management: They help the businesses they work with keep up with the constantly changing employment laws and rules at the local and federal levels. This ensures compliance with the Internal Revenue Service's (IRS) labor laws, reduces legal risks, and ensures payroll compliance
  • Training and development: Businesses can improve the skills and knowledge of their employees and new hires on many subjects, such as human resource management, by using PEO's training and development provided by their HR specialists

Best PEO for Small Business

What are the best PEOs for small businesses?

When it comes to the best PEO companies for small businesses, we have compiled five that might be a good fit for you:

  • ADP TotalSource: ADP TotalSource is one of the best PEO providers for small businesses because they offer many perks. Businesses that use ADP TotalSource can offer their workers a lot of benefits, such as health insurance and retirement plans. The PEO also takes care of important jobs like processing payroll and managing taxes, which gives companies peace of mind
  • Paychex: Paychex PEO specializes in providing complete solutions for managing remote teams, including easy-to-use HR tools that make things run more smoothly. They give you access to experts in managing online workers, which makes sure that your HR processes run smoothly. This provider can make hiring easier and help your remote teams do their jobs well
  • TriNet: With TriNet, you can access expert guidance on industry-specific HR challenges and ensure compliance with industry-specific regulations. They offer comprehensive HR support that caters to the unique needs of different industries, such as payroll services and much more
  • Rippling: Rippling manages both HR administration and IT, which makes it perfect for small businesses that need somebody to help them with these tasks. They offer many services, such as payroll processing, recruitment, managing benefits, and making sure state and federal rules are followed
  • Justworks: Justworks stands out as one of the best PEOs for startups. With its user-friendly platform, startups can easily navigate and utilize its features. The platform also offers access to affordable health insurance plans, providing startups with valuable benefits for their employees 

PEOs offer different services and perks, and they might also have their own drawbacks, so it's important to pick the right one for your business. When picking a PEO, companies should think about things like price, services, knowledge in the field, customer service and whether there are any additional costs.

Final Thoughts

Picking the right PEO for your small business can greatly affect how well you handle HR issues, payments, employee benefits administration, compliance, and other administrative tasks. They can lead to cost reduction, operational efficiency, and increased focus on growth for small businesses.

To make an educated choice, assess your business's needs and look at the features and prices of different PEOs. Using the latest technology and staying up-to-date on PEO solutions will help you stay ahead in a business world that is always changing.

Read reviews about the company you are considering on platforms like the Better Business Bureau (BBB), and consider what is said about the PEO's ease of use and user experience. After conducting extensive research on the reputation, accreditation, and comprehensive range of services offered by various companies, we also can offer these comprehensive PEO reviews. These evaluations are aimed at providing you with valuable insights and guidance to make informed decisions.

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