A professional employer organization, peo company is an HR outsourcing firm that provides services to small and medium-sized businesses. Typically, the PEO offering may include human resource consulting, safety and risk mitigation services, payroll management processing, employer payroll tax filing, workers, compensation insurance, health benefits, employers practice and liability insurance, retirement, regulatory compliance assistance, workforce management technology, and training and development. The PEO enters into a contractual co-employment agreement with its clientele. Through co-employment, the PEO becomes the employer of record for tax purposes through filing payroll taxes under its own tax identification numbers. As the legal employer, the PEO is responsible for withholding proper taxes, paying unemployment insurance taxes and providing workers compensation coverage.

Business owners often list workforce management issues among their biggest challenges in terms of difficulty. From recruiting and retaining employees to administering payroll and health care benefits, the HR tasks that companies must master are numerous and multifaceted, requiring sound long-term planning and a significant operational commitment. To meet these challenges, many companies are turning to outside HR experts, including professional employer organizations, PEO services in India, to manage all aspects of the employee experience, allowing business owners to focus on other priorities, like customer service or product development. But companies across the country are also using new technology, often with the help of their HR partners, to assist and motivate employees, improve managerial outcomes, and boost overall productivity.

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