Hand picked by our HR Technology experts after product testing, user research, and much debate - enjoy!
Did you know that, regardless of your company’s size, you could have a full-fledged HR department and offer a host of employee benefits that help improve recruiting and retention? While this might seem impossible for small companies, it’s not. PEOs, or Professional Employer Organizations, are vendors that help smaller companies leverage the power of an HR department to minimize employment risk and labor costs, offer employee benefits they otherwise can’t afford, take care of payroll and more.
The best PEOs serve as employers of record and bring a lot of “back-office” expertise to the table — plus, they work with hundreds of companies at a time and leverage economies of scale to get better group rates on benefits packages that you in turn get to offer your employees.
By following a co-employment model, you and a PEO share certain employer responsibilities. For example, PEOs cover all your HR and administrative work while you manage your business operations and people. In the end, you save time and money, and get to focus more on growing your business - without giving up control over your workforce (a common misconception).
To help you better understand PEOs and which one is right for your company, we put together the following guide that breaks down everything you need to know and consider, from who they are, what they provide, how much they cost, and more. Let’s begin.
We take research seriously. To make sure we’re offering our readers the very best solutions in a given software category, we are methodical, rigorous, and expansive in our research. We consult with HR professionals, vendors, and industry experts. We cut through the noise to bring you a carefully curated list of vendors, along with other essential information, to help you find the right software platform for your business.
Here’s how we chose who makes the cut:
Product: We believe in gaining a comprehensive understanding of a product before we recommend it, so we start by getting to know the software. Whenever possible, we meet with a senior executive (CEO or Head of Product) for a demo and Q&A. We also test the product ourselves to make sure it has a solid UI, intuitive workflows, and the features to make it a best-in-class offering.
User feedback: We go straight to the source and compile feedback on user experience. Real-world input supports our commitment to diligence in our software evaluation methods and the products we recommend. Keeping up with the everyday experience of HR pros also puts new vendors on our radar, and it keeps us close to our community so we can better connect the right products to the right people.
Financial metrics: We are certified finance nerds, so we use all the data we can get our hands on to make selections for our guides. We comb through data for concrete statistics like retention rates, growth, profitability, and scalability. We evaluate the bottom line of each product because we know making a software purchase can put your reputation on the line.
Best for a use case: Software is never a one-size-fits-all product. Sometimes the best solution is free or cheap. Other times it’s the one that is best for global companies or the one that’s sized right for early-stage startups. Keeping this in mind, we include solutions across the spectrum so our readers can find the best fit for their unique needs.
Here's more detail if you want to read more about how we research vendors. Our dedicated staff writers rely on hard data, impartial experts, and user feedback to ensure our reviews are helpful, truthful, and hopefully a pleasure to read!
We track thousands of HRTech solutions, these are the best PEOs per our research and expert council as of 2023.
Why we love it
:
Aside from being a global payroll software vendor and EOR provider, Papaya also lets you manage your global PEO through the same platform.
PapayaGlobal
Review:
Papaya Global is on a mission to revolutionize global payroll management. This international people & payroll platform is one of the most complete solutions for having employees in multiple countries. They can also act as a PEO, or connect you with one, in Canada, Australia, the UK, China, Japan, and more.
For hundreds of others countries, Ttheir platform can be used for hiring, onboarding, employee management, cross-border payments, and they have a global equity management tool. This last tool helps with offering equity to employees as a part of their compensation, regardless of where they are.
PapayaGlobal
Customers:
Toyota, GDIT, Microsoft, Wix, Teradata, Ncino
PapayaGlobal
Pricing:
Processing international payroll with Papaya Global is possible via the four following plans:
Papaya has 3 plans:
Best For
Companies that would like to manage a varied approach to global hiring and payroll in the same platform.
Why we love it
:
Oyster goes beyond what PEOs do by being a full-service EOR (employer of record). It assumes responsibilities of onboarding, payroll & benefits administration, and other day-to-day HR tasks so you can reduce the burden on your HR team and hire compliantly in over 180 countries.
Oyster
Review:
Oyster functions more like an employer of record (EOR) rather than a professional employer organization (PEO), which means they’ll take on the role of legal employer for your employees and can handle several HR processes on your half. The platform is notable for its health and benefits options which can cover employees residing in almost any country around the world. The insurance is typically locally sourced and complies with local laws. For organizations that employ a large number of virtual nomads, this feature is a real selling point, particularly if employees change location on a regular basis.
Oyster
Customers:
Quora, Wagestream, Impala, and Grover are some of the companies on Oyster’s long list of customers.
Quora, Wagestream, Impala, and Grover are some of the companies on Oyster’s long list of customers.
Oyster
Pricing:
Oyster pricing starts at $29 per month for each contractor, and between $499-$699 per month for each employee (price per employee depends on the selected country). If your business is looking to scale quickly, custom pricing is also available.
Oyster pricing starts at $29 per month for each contractor, and between $499-$699 per month for each employee (price per employee depends on the selected country). If your business is looking to scale quickly, custom pricing is also available.
Best For
Businesses whose employees either reside in or often move to different countries, as well as businesses looking to hire globally would get the most from Oyster.
Why we love it
:
ADP is an industry leader in HR by market share and so worth a demo if you are considering adding a PEO.
ADP
Review:
Best known for their payroll offering, ADP offers a suite of other HCM products including a PEO called ADP TotalSource. ADP is known for over delivering on customer success, something that has made them a behemoth in the HR world.
ADP
Customers:
Cimquest, 4C Foods Corp, Nina Footwear, Kidpik, Safe Homes of Orange County, Grand Street Medical Associates
The Boston Globe, The Bancorp, Douglas Ellman Real Estate, Margaritaville
ADP
Pricing:
ADP's PEO pricing is not disclosed on their website, since these vary from one company to another. That being said, similar services tend to range from $120 to $160 per employee, per month. Also, according to ADP's own research, PEO costs average 2-12% of wages.
Custom pricing is available upon request of a demo for each specific product.
Best For
ADPs PEO offering is geared towards SMBs (less than 999 employees) in over 180 countries.
Why we love it
:
Justworks is a simple and friendly platform for many an HR need. Their payroll solution is stellar and their known for great customer service, so that could make a great PEO for you.
Justworks
Review:
With 2,500 customers, JustWorks is one of the larger players in the PEO space, and offers best-in-class technology that allows everyone from HR to new employees to seamlessly access and use their offering.
Justworks
Customers:
Axios, Qubit, Area17, Museum Hack
Axios, Qubit, Area17, Museum Hack
Justworks
Pricing:
Justworks offers competitive and transparent pricing, but it's best to reach out for a personalized quote on their PEO offering. It is worth noting, however, that their plans tend to be flexible, growing or shrinking with your company.
Justworks has two types of plans, Basic and Plus. The former includes payroll, benefits, HR tools, and compliance. The latter has all the modules from basic, plus access to medical, dental, and vision plans.
The price of each plan depends on the number of employees you have. For instance, a company with 25 to 99 employees would pay $44 per employee per month for Basic or $89 user/month for Plus.
Best For
Justworks is mainly for small or medium-sized businesses. Their plans can accommodate organizations with less than 25 employees or slightly more than 175.
Why we love it
:
TriNet provides SMBs with full-service HR solutions that are tailored to their industry. Their expertise range from human capital and benefits to risk mitigation, compliance, and payroll.
TriNet
Review:
TriNet is easily one of the largest players in the world of professional employment organizations with 340,000 lives covered and 17,500+ customers. They offer a high level of customer service, and a variety of products you’d expect from an organization with their scale.
TriNet
Customers:
Left Field Labs, Audeze, Big Health, Redwood Brands LLC, Fort Mason Games
Left Field Labs, Audeze, Big Health, Redwood Brands LLC, Fort Mason Games
TriNet
Pricing:
Pricing and plans are not disclosed upfront by this company
Pricing and plans are not disclosed upfront by this company
Best For
Small to medium-sized businesses
Why we love it
:
Insperity boasts a full-service HR solution that's always tailored to your business. Their Fortune-500-level benefits include medical, dental, and vision coverage.
Insperity
Review:
Insperity’s Workforce Optimization product allows small and medium-sized companies to have stellar payroll, benefits, on-boarding and everything else you’d expect from one of our best PEOs.
Insperity
Customers:
Vynamic, Evolve Biosystems, ACCESS Specialty Animal Hospital
Vynamic, Evolve Biosystems, ACCESS Specialty Animal Hospital
Insperity
Pricing:
Insperity's PEO cost will vary depending on the benefits you needs and your employee count.
Insperity's PEO cost will vary depending on the benefits you needs and your employee count.
Best For
Insperity can be a good PEO for organizations with 5 to 149 employees, or those with 150 to 1,000.
Why we love it
:
Gusto recently an ATS to its features. It can handle job posting, syndication to job boards, interview notes, and basic scheduling – all within the Gusto platform. It is currently optimized for employers with “moderate” hiring needs, but they can help you determine whether their new native ATS or another within their ecosystem is right for you. The tool is promising and it operates well within the environment it, and, like the platform itself, has the uncanny feel of a product that is sound in its inception and sturdy in its architecture
Gusto
Review:
Gusto has done a great job avoiding a common software pitfall. Many good tech teams have fallen under the spell of the Shiny New Thing, and, in allowing themselves to be distracted and diluted, their core products and loyal customs suffer from neglect. Gusto has kept a steady pace through the years and their primary focus on payroll and benefits has not been clouded by impulsive building more features into their stack. Instead, they work with numerous integrated partners who take the wheel on new initiatives, letting Gusto stay in its lane.
Gusto
Pricing:
Best For
Even budget-strapped startups can afford Gusto’s basic plan, and for companies who have some bank capital to invest in human capital, the top-tier Premium plan is a great choice, especially if they have an HR department of one person.
Why we love it
:
Similar to ADP, PayChex is one of the gorillas in this space that warrants your attention if you want to be comprehensive about the best PEO offerings.
PayChex
Review:
Paychex is another massive player in the general human resources space that has a PEO offering for small businesses. If you’re looking for a partner that will come on site to help setup your payroll, benefits, onboarding, etc - then take a look at Paychex.
PayChex
Customers:
ESET, Funnelbox Inc., Smile Cafe, H.Y.P.E. Counseling Services, ASG, Pet Partners
ESET, Funnelbox Inc., Smile Cafe, H.Y.P.E. Counseling Services, ASG, Pet Partners
PayChex
Pricing:
PayChex's pricing is not provided on their website, but the process to get a quote is pretty quick and simple.
PayChex's pricing is not provided on their website, but the process to get a quote is pretty quick and simple.
Best For
SMBs in search of a good PEO and perhaps payroll services.
Typically, small and early stage companies that don’t have an in-house HR department work with PEOs to cover the necessary but all too time-consuming tasks that keep them from focusing on what matters most. They want to run a compliant business with robust employee packages that attract top talent and keep current employees engaged. And they want to have the brainpower to focus on scalable business strategies in the process.
If this sounds like your business, know that you can get all of this with the help of a professional employer organization. Here’s a breakdown of other common reasons why small businesses lean on PEOs and how they can help you achieve your business and human resource goals:
Some PEOs offer all of these things and some are more specialized. But for the most part, PEOs serve as a “one stop shop” for your HR needs. So instead of using individual software programs for each of these needs, you can use one PEO to cover it all.
Think about what’s most important to you, then check out our next section to see what the top PEOs offer so you can find one that works for you.
As helpful as PEOs can be, there are a couple things to keep in mind before committing to one. The considerations we’ve outlined here are based off of common mistakes companies have made when using a professional employer organization. Learn from them now so you can implement seamlessly and get the most bang for your buck
If you have concerns about any of these, make sure to ask about them in your demo. Keep reading for other recommended demo questions...
As we’ve been mentioning, there are a lot of benefits to using a PEO. For simplicity, we’re going to bucket them into three distinct categories — people, cost, and focus.
People Benefits:
Better Cost:
More Focus:
To help you calculate your return on investment, check out our ROI calculator for professional employer organizations. It covers a variety of key points, including:
Pricing depends on a number of variables, but the most common pricing model that PEOs use is a per employee/per month fee. For example, smaller companies can expect to start with a price of $100 per employee per month. Sounds pretty straightforward, but make sure your provider doesn’t have any hidden fees on top of your monthly charge — for example, percent of payroll in addition to admin fees.
As we’ve mentioned, PEOs allow you to essentially outsource your HR function and back-office work so you can focus on business strategy and day-to-day operations. So what exactly does this include? Here is a list of features you can expect from professional employer organizations.
The services that PEOs offer are designed to give you a fully functioning HR department without having to hire a whole team or sign up for a multitude of separate software programs. With the goal of helping you run a sound business and reduce costs for both you and your employees, PEOs will give you the peace of mind you need to focus on your business’ growth.
Whenever you’re considering a new human resource tool or partner (like a PEO), you want to fully understand what’s involved in the product/implementation/cost. That way there won’t be any surprises as you implement. To ensure you can confidently invest in a PEO, make sure to ask these questions during your demo and sales conversations:
Additionally, it’s always a good idea to have a sense for these more general implementation questions. Work them into your demo as it’s relevant for each PEO in question:
No matter what new software program you’re investing in or what third-party organization you’re partnering with, we always recommend having a solid implementation plan in place. Here are a few general best practices to get you started:
For PEOs specifically, you’ll want to be prepared to export data from your existing HRIS, then import it into your new system. During your demo, make sure to talk about what’s involved here so you can prepare accordingly on your end. Then, you’ll want to focus on employee training — both for those with admin access and everyone else who will be a “regular” user.
PEO stands for professional employment organization, an entity specifically setup to help smaller companies take care of their HR needs.
A professional employment organization is a vendor that helps small companies leverage the power of an HR department to minimize employment risk and labor costs, offer employee benefits, take care of payroll and more.
A professional employment organization works by sharing employer responsibilities. An organization will tend to handle its people and business operations while shifting administrative and HR functions to the PEO.
Professional employment organizations can provide the following services:
Pros of a professional employment organization include:
While there are cons of a PEO, they are minimal, such as:
Professional employment organizations are designed to be used by small and mid-sized businesses.
At the end of the day PEOs can help alleviate a lot of the administrative tasks that are required when running a business, so you have more time to focus on growing successful teams — and your bottom line.
If your company fits the criteria we’ve outlined here, it’s time to pick a few PEOs and schedule demos to find the one that’s right for you.
Stay on top of what really matters in HR and People Tech. Subscribe to our newsletter to keep up on the latest news, trends, and culture.