What is PEO?

What is a PEO? Can it help a small business?

What is a PEO? Imagine an environment where your time, energy and resources are focused on increasing your company’s bottom line. As a business owner or manager, you are free from the headaches and hassles associated with managing payroll, unemployment insurance, and workers’ compensation claims. You have access to a team of professionals who provide expertise in multiple areas including human resources, compliance, risk management, and more. You are able to provide these services for your business which, in turn, allows you to attract and retain better employees.

In short, a PEO is a Professional Employer Organization that provides human resource services and workers’ compensation insurance for small to medium sized businesses. Health insurance packages can be thrown in there too. PEOs help employers create great places to work, attract more skilled employees, reduce turnover, and enhance employee morale. As a business owner, you gain a strategic partner in the growth of your business. You can focus on your core competencies to maintain and grow your bottom line…sounds like a win-win to us!

Small Business, business owner strategy, strategic partner, win win

How does it work?

It’s a type of co-employment. The client retains ownership of the company and manages the day-to-day activities of the workers while the PEO manages the back-end of employment laws and regulations associated with running a business – things like:

  • workers’ compensation insurance
  • management of payroll-related taxes
  • human resource functions
  • benefits
  • employer-related administrative functions
  • …the list goes on and on.


Each PEO may provide different services so finding the best one to fit your needs is important. There is a PEO for every industry and we have access to all of them. We know the ins and outs and can help guide you in the right direction. You can establish a working relationship between yourself, the PEO, and your employees to create the most value and growth. They can simply provide payroll services and workers’ comp, or they can become a strategic partner in the growth and success of your business. What is it that you are looking for?

Do I lose my XMod?

Nope! PEOs operate with multiple coordinated policies (MCP) – each business that decides to join forces with a PEO obtains their own workers’ comp policy. They track losses and promulgate an XMod. Don’t get confused with a staffing company, that is a whole different ball game. More on that later.


The PEO model aggregates the employees of many small businesses together to harness the buying power normally reserved for much larger businesses. What does that mean? Clients get rate flexibility, safety incentives, and the perks of all the services I mentioned above. You get the buying power of a large company – you can stand out among your competitors and become a small business with a large presence. Think small cat, lion shadow.

What is PEO?

I will leave you with a little more…did you know that businesses whom partner with a PEO are 50% less likely to go out of business? The National Association of PEOs found that statistic among others:

  • There are 907 PEOs in the United States
  • Businesses in a PEO arrangement grow 7-9% faster
  • See more here

MartinoWest can help!

We specialize in PEOs. We can help point you in the right direction, find the perfect fit for your company. Even just a chat on the phone to help answer questions, we are here for you.

Ready to get started?

Click here to get working on a free quote.

More questions?

Give us a call! 916.751.5913


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