Sometimes companies have trouble meeting their human resources needs, especially while also trying to increase profits. To meet some of these needs, many companies are hiring professional employer organizations (PEOs).
When hiring one of these organizations, the company and its employees become employees of the PEO, and the company delegates many of the HR responsibilities onto the organization. Though the company still officially hires their employees, the PEO handles payroll, administering benefits, workers’ compensation, medical insurance and retirement accounts. Then, the company pays the PEO for its services along with an amount to cover the payroll for the employees.