Employee Leasing vs PEO

Employee Leasing vs PEO

June 16, 2017 | By Tailored Solutions

The PEO industry has been around for over 25 years and has dramatically evolved in that time period. When the industry first started it was often times referred to as employee leasing.

What is Employee Leasing?

Employee leasing was a process by which companies would lease back their own employees from an employee leasing company. The employee leasing company would then take on all the administrative tasks associated with those employees. Workers' compensation, payroll, Human Resources (HR), and many other services were then the legal responsibility of the employee leasing company to provide to its new leased employees. 

PEO vs Employee Leasing

Fast forward to present day and the word “employee leasing” is not really used in the market place. The new catch phrase is Professional Employer Organization, or PEO.

Today PEO’s are known for being full-service providers that offers an amazing array of products and services.

A PEO can offer a small to mid size company the back office and benefits platforms of a Fortune 500 company. Now employers can provide best in class health benefits, 401k platforms, payroll systems, HRIS, time and attendance and competitive workers' compensation.

Benefits of a PEO

PEOs administer their services through payroll. The only thing the business owner has to do is input payroll and pay the PEO for taxes, fees and services and the PEO administers all the rest. The business owner can now focus on running his or her company and rest assured a professional team of people is taking care of the non productive tasks associated with having employees.

Business owners often pay less for their PEO services than they would pay for simple, HR activities... and receive much more in return. 

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