To handle ever-increasing HR challenges, businesses are turning to Professional Employer Organizations (PEOs), which help small and medium-sized businesses with their human resource functions. Here are some common terms PEOs use to describe their services

1. COMMON
PEOTERMS
EXPLAINED
BUSINESS PERFORMANCE GUIDE

2. To handle ever-increasing HR challenges, businesses are
turning to Professional Employer Organizations (PEOs),
which help small and medium-sized businesses with their
human resources functions. According to the National
Association of Professional Employer Organizations
(NAPEO), there are about 700 PEOs serving tens of
thousands of businesses in the U.S. And NAPEO estimates
that the PEO industry grew $10 billion to reach $81 billion
in gross revenues in 2010.
These numbers alone show that HR outsourcing is growing.
And with this trend comes new terms to follow.
Here are some common terms
PEOs use to describe their services:
2w | insperity.com Sharet | 800.465.3800

3. Client employer/client company
This is a term PEOs use to describe the legal entity
that signs the contract. So when you see “client
employer” or “client company” listed in a contract,
this is typically your role.

4. Co-employment/Co-employer
NAPEO defines co-employment as a contractual
allocation and sharing of employer responsibilities
between a PEO and its client. In a PEO relationship,
workers are technically employed by two separate
entities: you the business owner and the PEO. The
business owner controls the company’s day-to-day
duties and core job functions. And the PEO (co-em-
ployer) handles personnel-related functions such as
payroll, benefits, HR, workers’ compensation, etc.
“A typical HR manager has to be an expert in many different
fields of HR and employee relations,” says Emily Dusablon,
human resources advisor for Insperity. “When you work with
a PEO, you get trained specialists in all of these fields.”
4w | insperity.com Sharet | 800.465.3800

5. Reduced business liability
When a PEO refers to “reduced business liability,” it
simply means the PEO helps manage and reduce
much of your company’s liability. PEOs are
comprised of knowledgeable professionals who
specialize in HR and can be trusted to handle issues
in a timely and thorough manner, including
employee relations support, employee liability
awareness training and EEOC claim investigation,
reporting and mediation.
5w | insperity.com Sharet | 800.465.3800

6. Government compliance
Every company has to abide by certain state and
federal rules with regard to HR. But exactly what those
are and how they might differ between locations is not
always clear to the individual business owner. Many
of the larger PEOs offer client companies “government
compliance” services, or HR regulatory assistance,
guiding them through the often cumbersome process
and helping to ensure that the business remains in
full compliance.
6w | insperity.com Sharet | 800.465.3800

7. Researching benefits packages and managing plans
can eat up a lot of your time.A PEO will allow your
employees access to various insurance plans, flexible
spending accounts, retirement plans and other
essential employee benefits. By providing high-quality
employee benefits, you’re able to attract and retain top
employees through competitive benefits packages.
Employee benefits management
7w | insperity.com Sharet | 800.465.3800

8. HR administrative relief
PEOs take on your administrative duties to ensure
that important issues will be handled correctly, such
as government compliance, hiring employees, employee
benefits and employer liability management. Decreasing
administrative responsibilities – often busywork – is
a quick way to increase productivity.
Learn more about the advantages
of PEOs and co-employment.

9. To find out more or learn how
Insperity can help your company,
call us at 800-465-3800.
Visit us at insperity.com.
About
Insperity
The information contained in this document is for general, informational purposes only and
is not intended to be legal advice. This information is not a substitute for the guidance of a
professional and should not be relied upon in reference to any specific situation without first
seeking the advice of a qualified HR professional and/or legal counsel regarding applicable
federal, state or local laws. Insperity and its employees make no warranties, express or implied,
and make no judgments regarding the accuracy of this content and/or its applicability to a specific
situation. A reference or link to another website is not an endorsement of that site or service.
Insperity, a trusted advisor to America’s best businesses for more
than 26 years, provides an array of human resources and business
solutions designed to help improve business performance. InsperityTM
Business Performance Advisors offer the most comprehensive suite
of products and services available in the marketplace. Insperity
delivers administrative relief, better benefits, reduced liabilities
and a systematic way to improve productivity through its premier
Workforce OptimizationTM
solution. Additional company offerings
include Human Capital Management, Payroll Services, Time and
Attendance, Performance Management, Organizational Planning,
Recruiting Services, Employment Screening, Financial Services,
Expense Management, Retirement Services and Insurance Services.
Insperity business performance solutions support more than
100,000 businesses with over 2 million employees. With 2011
revenues of $2 billion, Insperity operates in 56 offices throughout the
United States.
9w | insperity.com Sharet | 800.465.3800