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PEO Misconceptions

Written by Brandon Wright


May 16, 2024

In the evolving landscape of business management, Professional Employer Organizations (PEOs) have become essential partners for companies seeking to streamline operations and enhance compliance. However, several misconceptions still persist about what PEOs do and how they function. As HRDelivered, your trusted partner in PEO services, we aim to clear up these misunderstandings and provide clarity on how PEOs can benefit your business.

Misconception 1: PEOs Take Over Your Business

One of the most common misconceptions is that partnering with a PEO means relinquishing control over your business. In reality, PEOs like HRDelivered provide support and expertise while allowing you to retain full control over your company’s operations and decisions. Our role is to manage HR-related tasks such as payroll processing, benefits administration, and compliance, enabling you to focus on core business activities and profitability.

Misconception 2: PEOs Are Only for Large Companies

Another misunderstanding is that PEO services are only suitable for large enterprises. On the contrary, PEOs are particularly beneficial for small and medium-sized businesses (SMBs). By partnering with a PEO, SMBs gain access to a broad range of HR services and employee benefits that would otherwise be too costly or complex to manage independently. HRDelivered offers comprehensive solutions tailored to the needs of businesses of all sizes, ensuring that even small companies can compete with larger firms in attracting and retaining top talent.

Misconception 3: PEOs Are Too Expensive

Some businesses hesitate to engage with PEOs due to the perceived high cost. However, PEO services are often more cost-effective than managing HR functions in-house. By pooling resources, PEOs can offer competitive rates for benefits and insurance, reducing overall HR expenses. Additionally, the time and resources saved by outsourcing HR tasks can lead to increased productivity and profitability. HRDelivered’s pay-as-you-go Workers’ Compensation Insurance and bundled services ensure you receive high value at a manageable cost.

Misconception 4: PEOs Only Handle Payroll

While payroll processing is a significant component of PEO services, it is far from the only one. PEOs provide a comprehensive suite of HR solutions, including employee benefits administration, workplace safety training, compliance with state and federal regulations, and more. At HRDelivered, we go beyond the basics by offering unique solutions like Cyber Liability Insurance and Employment Practices Liability Insurance (EPLI) to protect your business from various risks. Our extensive services ensure that all aspects of your HR needs are covered, allowing you to concentrate on growing your business.

Misconception 5: PEOs Don’t Improve Employee Benefits

Some employers worry that using a PEO might result in inferior employee benefits. In fact, PEOs often enhance the quality and variety of benefits available to employees. By partnering with a PEO, businesses can offer comprehensive benefits packages that include health insurance, dental, vision, life, and disability coverage. These benefits not only improve employee satisfaction and retention but also attract top talent. HRDelivered’s extensive benefits packages ensure your employees receive the best possible coverage and support.

Misconception 6: PEOs Are Not Secure

Security concerns can deter businesses from utilizing PEO services. However, reputable PEOs like HRDelivered employ robust security measures to protect sensitive information. From secure payroll processing systems to comprehensive cyber liability insurance, we prioritize the safety and confidentiality of your business data. Our commitment to security ensures that your company’s information is well-protected against potential threats.

Misconception 7: PEOs Are Not Compliant with Regulations

Another common misunderstanding is that PEOs might not adhere to regulatory requirements. In reality, PEOs are experts in compliance and help businesses navigate the complex landscape of state and federal regulations. HRDelivered’s compliance services handle government regulations, including industry-specific requirements, ensuring your business remains compliant and avoids costly penalties. By staying updated with the latest legal changes, we provide peace of mind and allow you to focus on running your business efficiently.


Professional Employer Organizations (PEOs) like HRDelivered play a crucial role in supporting businesses by managing HR functions and ensuring compliance. By debunking these common misconceptions, we hope to demonstrate how PEOs can enhance your business operations, provide superior employee benefits, and improve overall productivity. Partnering with a trusted PEO allows you to concentrate on what matters most—growing your business and achieving success.

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