benefits of professional employment organizations

When Should You Resort To Using PEO?

Hiring the right people to fill the right positions is an essential step in building a business. With a good team, it becomes easy to work collectively towards achieving the set goal of the business.

Several options are available to owners when looking to hire new employees into the business. The first, and what looks to be the most common option, is to set up an HR department. This department is then saddled with the responsibility of sourcing and recruiting new hires.

However, the option of setting up an HR department might not work for every business type, and that is where using a certified Professional Employment Organization (PEO) comes to play..

If you’ve not heard about this before, then you’re in the right place. If you have, there will be a lot to learn about when you need PEO for your startup from this article.

What is a Professional Employment Organization?

A Professional Employment Organization (PEO) is set up with the sole aim of linking prospective employees to companies or businesses that need them. These organizations have a vast network of individuals with different skills who are always available to be hired.

As a company that needs the services of an expert in a particular field or from a location, you can reach out to this organization with your specifications, and they can provide you with just what you need.

Professional Employment Organizations oversee the whole process of vetting these employees. As such, businesses that resort to using PEOs have little or no worry regarding the quality of the employee.

While many businesses are aware of the operations of Professional Employment Organizations, the challenge has always been knowing when they should resort to it. The time and reason for resorting to PEOs differ from one business or startup to another. However, some major points when you should consider working with Professional Employment Organizations include:


When you don’t have the funds to hire HR staff

Earlier, we mentioned that many businesses use the HR department option to hire new employees. This looks to be the easy step as it will consist of skilled individuals in the recruitment process.

However, what happens if you are a new startup and do not have the funds needed to set up a viable HR department? Does that mean you won’t hire new employees or get the chance to work with the best people in your business field? Of course not, and this is where working with a PEO becomes important.

Professional Employment Organizations have, as part of their setup, an HR department that oversees the whole process. The organization does for your startup what the HR team would have done, saving you the cost that comes with setting up a department of your own.

When you want to employ seasonal staff

One of the challenges of the regular full-time hire system that startups resort to is that some members in the team are not needed at all times. Hiring these people on a full-time basis will mean you have to pay them even when they are not working.

Many startups overlook the cost of hiring seasonal staff on a full-time basis for the security that comes with having them on their team. There is the fear that if you don’t keep them on the team on a full-time basis, your competitors may come after them and the services they offer. It also means that you may not have them when you need the services they offer.

By working with a Professional Employment Organization, you don’t have to worry about this. Putting things in perspective, it will not be wrong to say that if your startup operates on the services of skilled individuals for specific seasons, it is best to work with PEOs. This organization can provide you with employees who have the right skills just when your startup needs them.

When you want to hire from an unfamiliar location

As your startup records increased productivity levels and starts to grow, there is a possibility that you will have to hire more individuals to the workforce. Looking within the location you are familiar with may limit your access to experts. How can you hire an individual with a track record of success at what they do from an unfamiliar location? The simple and best answer to that is to work with PEOs.

benefits of professional employment organizations
Professional Employment Organizations help link your startup to the right employees.

Take, for example, you want to hire a financial expert to draw out a balance sheet for you, and you want a person from an unfamiliar location. You will have to be sure the person doesn’t just have the right qualifications but also has years of experience. Ascertaining these qualities might be easy when hiring from a familiar location. However, the same cannot be said when you are hiring from an unfamiliar location.

Professional Employment Organizations have a network spanning different locations, including those familiar and unfamiliar to you.

When you are looking to gain faster market entry

It is one thing to be all out looking for the best employees, and another thing to find professionals who want to work with your startup. Market entry, especially when building an effective workforce, is something many startups ignore.

  • How are you certain that the expert technician you are looking to hire wants to work for your startup?
  • What about your startup gives that good impression that will attract the quality of individuals you want on your working team?

These factors, among others, are responsible for why many businesses don’t gain market entry when looking for employees. However, by working with a Professional Employment Organization, you can get faster market entry and hire good engineers, marketers, etc. Your startup can ride on the reputation that the PEO has built and sustained over the years.


As a business owner, knowing when to do something is more important than doing it. The right thing done at the wrong time may result in a poor result.

Knowing when you should resort to using a Professional Employment Organization can get the best individuals on your working team and increase your business productivity level. You can also save some costs in the process, especially those that come with setting up an HR department as a startup.


If you’re an early stage CEO, we handle and automate your HR, finance, and legal ops — so that you don’t have to. We help you Be Scrappy, Not Sloppy.

We understand that ops can be painful. If you have any questions or need assistance with your ops, drop us a note at We’ll do our best to help.

Salman Zafar

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