Best Professional Employer Organizations (PEO) — 2023

A complete guide to finding, selecting & implementing the right PEO partner

Phil Strazzulla
HR Tech Expert, Harvard MBA, Software Enthusiast

Contributing Experts

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The Best Professional Employer Organizations

Hand picked by our HR Technology experts after product testing, user research, and much debate - enjoy!

Aside from being a global payroll software vendor and EOR provider, Papaya also lets you manage your global PEO through the same platform.
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.
ADP is an industry leader in HR by market share and so worth a demo if you are considering adding a PEO.
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.
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.
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.
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
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.

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Introduction to Professional Employer Organizations (PEO)

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.

Our criteria: How we chose the best vendors

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!

Top Professional Employer Organizations

We track thousands of HRTech solutions, these are the best PEOs per our research and expert council as of 2023.

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

Pricing:

Processing international payroll with Papaya Global is possible via the four following plans:

  • Payroll: They’ll manage your entire payroll process for one all-inclusive fee per employee, per month. Depending on your operation, this fee will fall between $20 and $100 USD.
  • Global EOR: Papaya Global’s in-country partners function as employers of record, being responsible for payroll, workforce management, benefits, and compliance, and more. You can still stay up-to-date on everything through the platform, and this plan is between $770 and $1000 per employee per month.
  • Contractor Management & IC Compliance: Particular services are outsourced to a domestic or foreign contractor, for periods of rapid growth and the need to reduce labor costs. This plan starts at $25 per employee per pay cycle.
  • Payroll Intelligence Suite: This plan lets you consolidate all workforce and payroll data from all your operations into a single dashboard, priced at $250 for an annual plan or $320 quarterly per location.

Papaya has 3 plans:

  • Payroll: In this plan, Papaya runs and manages your entire payroll process for one, all-inclusive fee ranging that is $20 per employee per month. 
  • Global EOR: In this plan, Papaya's in-country partners will serve as employers of record and assume responsibility for payroll, workforce management, benefits, compliance, and more. The pricing of this plan is $650 per employee per month.
  • Contractor Management & IC Compliance: With this plan, you can outsource particular services to a domestic or foreign contractor, paying $25 per employee per pay cycle.

Best For

Companies that would like to manage a varied approach to global hiring and payroll in the same platform.

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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

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.

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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

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.

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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

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.

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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

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

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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

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.

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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:

  • Simple: $40/month +$6/month/person
  • Plus: $60/month +$9/month/person (limited time sale)
  • Premium: call sales for customized plan options 
  • Contractor only (no W-2 employees): $6/month/person
  • Simple: $40/month +$6/month/person
  • Plus: $60/month +$9 / month/person (limited-time sale)
  • Premium: call sales for customized plan options
  • Contractor only (no W-2 employees): $6/month/person

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.

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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

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.

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Use-Cases: Why Use A Professional Employer Organization (PEO)

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:

  • Offer employee benefits: PEOs allow you to offer a host of employee benefits, like affordable health insurance, 401(k) plans, life insurance, disability, commuter perks, employee discount programs, and more. In most cases, a PEO will essentially have its own employee benefits package that is then passed on to your employees.
  • Outsource payroll: “Payroll” involves a lot more than sending employees their paychecks. There’s also balancing and verifying payroll data, reporting taxes, factoring in wage deductions, record keeping, filing W-2s and 1099s, and more. Needless to say, it’s a lot — but PEOs will handle all of this for you. Not only that, PEOs will submit payroll using their own tax-ID. All in all, there’s less paperwork for you and reduced risk of filing mistakes if you did it yourself.
  • Manage employee records/paperwork: From state and federal W-4 forms, to federal I-9 forms, to state-mandated docs, to personal info and emergency records to application forms, employee paperwork is seemingly endless. Fortunately, PEOs can help you better manage it through software, as well as help in actually filling out and submitting these forms.
  • Streamline onboarding: Paperwork is one piece of the new hire onboarding puzzle. You also have to train new employees, get them familiar with company policies, and go over your employee handbook. PEOs can take this off your plate with their compliant and ready-made trainings, policies, handbooks, and more.
  • Get workers’ comp: Many PEOs provide workers’ compensation insurance to protect your company and your employees from the costs of work-related injuries or illnesses and any resulting employee claims.

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.

Pro Tips on Best Professional Employer Organizations

Preparing for Success: Considerations & Solutions to Common PEO Mistakes Companies Make

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

  • Still in control: The biggest misconception companies have is that they lose control of their employees because they are part of a PEO.  Companies that are part of a PEO still have full discretion over any employee related decisions - think about the structure of a PEO more as a loophole to get better benefits and employee services than as a parent organization.
  • Know the cost breakdown: Some PEO vendors charge hidden fees, so make sure you get a breakdown of how much money you’ll owe and where it's going (vendor fee, salaries, state/local taxes, etc).
  • Prevent overly-complicated onboarding: You want your new hires to have a simple and informative onboarding experience as they get up and running in their new roles. This means making it easy for them to access information and submit applications/sign up forms for things related to payroll, benefits, etc. So make sure you work with your PEO on an optimized onboarding/training process that gives new employees a positive first impression of your company.
  • Understand support options: Your employees and internal admins will need some level of customer support from time to time. That way issues can be resolved quickly and efficiently, and you won’t have to worry about frustrated employees or dips in morale. Try to understand what level of customer support your PEO offers, whether a dedicated person is assigned to your company, what hours he or she is available, how long response times are, etc.
  • Beware of bad tech: Some PEOs are legacy organizations with old technologies and/or poorly integrated software add-ons. Use your demo to get a sense of this so you can plan accordingly.  Really dig into the workflows for the employees, HR, and executives.
  • Opt for ease of use: When assessing the tech side of things, make sure to factor in how easily employees can access their information. Some older systems involve complicated processes and have key pieces of information buried in hard-to-find areas. Opting for more streamlined platforms that are optimized for user-experience is key.
  • Supplement with EEOC compliance: While PEOs pride themselves on being HR compliant, many are not compliant with anti-discrimination protocols, so make sure you supplement with EEOC compliance.

If you have concerns about any of these, make sure to ask about them in your demo. Keep reading for other recommended demo questions...

Benefits and ROI

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 employer branding = better recruiting: When you can package your benefits and expand your benefits offering, you give your employer branding a leg up over your competition. Candidates will see how much you offer and will be more likely to apply, accept and keep a job at your company.
  • Increased employee retention: While your benefits package might be enough to keep an employee happy, giving them transparency and better access to their benefits and payroll will further increase engagement and morale. They’re more inclined to trust you as their employer and will thus stick around.

Better Cost:

  • Decreased administrative overhead and HR headcount: You can more efficiently run your HR tasks without having to hire an entire internal team. That means less people to train. Less people to manage. More time and money in your company’s pocket.
  • Cost savings for you and your employees: By leveraging your PEO’s group rates, you will end up paying less for your benefits package and your employees will end up paying less for each benefit offering.

More Focus:

  • Streamlined management of tools: Instead of investing in a payroll software program, a compliance platform, a benefits and insurance tool, etc., you can house all your HR functions in one place. That means less to keep track of and more productivity as a result.
  • More time to focus on business operations and growth: Imagine all the big picture planning and executing you can do when you’re not stuck in the administrative HR weeds. PEOs take so much tedious work off your plate so you can focus on building a scalable business.

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:

  • How to measure increases in productivity
  • How having an all-in-one partner can save you money on compounding fees from smaller, more specialized programs

Pricing

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.

Features: What You Can Expect from a PEO

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.

  • Single sign-on: Giving your employees one login to a comprehensive HR dashboard not only increases security but it provides a better user experience. Employees can more easily and securely access info on payroll, health insurance, 401(k), etc.
  • Corporate-level benefits: Large companies seem to have larger benefits packages. With PEOs, smaller companies can, too. Such benefits go beyond the typical health and retirement plans and include everything from commuter benefits to dependent care to pet insurance to discounts on wireless plans, spa treatments and gyms — and more.
  • Trainings and onboarding: In addition to providing benefits, PEOs also help educate employees on each benefit option so they can make the right decisions for themselves. Further, PEOs help you with on-site employee onboarding and trainings so new hires can get familiar with your policies, employee handbook, and more.
  • HR consulting: PEOs have in-house HR experts and consultants that can help you with your day to day HR needs, from recruiting to onboarding to compliance, and more.
  • Time tracking & PTO requests: Gone are the days of punch cards and written or verbal requests for time off. PEOs help automate time tracking and PTO requests, which means payroll processing is easier and more accurate, you have a better picture of team coverage each day, and more.
  • Risk-mitigation: PEOs are HR-certified organizations, which means they know HR law and will ensure your company is not only following the right state and federal labor laws but also is using HR best practices. While, in most cases, you’d be required to adopt their policies, procedures and employee handbook wording, you’ll greatly reduce your liability as an employer.
  • Streamlined payroll processing: PEOs handle all aspects of payroll, including auto-deposits, one-off payments, and payroll tax filings. And they’ll do all of this for everyone who works for your company, from salaried employees to hourly workers to full- and part-time staffers, even contractors and freelancers.
  • Flexible permissions: While a PEO assumes the responsibility of an HR department, they’re not the only ones with access to the back-end. You can give admin privileges to certain team members that will need access — for example, an accountant that needs to make expense reimbursements, an HR lead who has PTO requests to approve, or a COO to elect benefits.
  • Company directory: Keep employees connected with an online company directory complete with employee photos, titles and contact info, plus a calendar with birthdays and work-iversaries, and more.
  • 24/7 support: Because business has gone well beyond the typical 9-5 hours, many PEOs offer support 24/7 — be it by phone, email, chat, text, even Slack. And depending on the need, your employees can reach a PEO representative directly — it doesn’t just have to be an elected admin that does the outreach for you.
  • Mobile app: In addition to the self-service tools your employees can use to look up things like expenses, benefits enrollment, PTO requests, paycheck history, etc., many PEOs also offer mobile apps for on-the-go access.

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.

Demo Questions: What to Ask During Your PEO Demo

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:

  • How do you handle employee data securely?
  • What other systems (accounting, expenses, time tracking) do you integrate with?
  • How are employees entered into the system?
  • Can you walk me through how employees are onboarded?
  • Are you available in all the states we do business with for payroll?  Benefits?
  • How long does it take to run payroll each cycle?
  • Do you manage unemployment benefits?
  • What benefits do you have beyond healthcare?
  • How do you handle withholding taxes?
  • Do you send employees W-2s and 1099s?
  • How do you help navigate ACA, COBRA, and other benefit related compliance issues?

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:

  • How will this solution fit into the rest of my tech stack? What integrations do I need?
  • How will others in the organization use this solution?
  • What are the key features I want to ask about?
  • What are the things that would make me nervous about buying this sort of solution?
  • How does pricing work?
  • What implementation guidelines do they suggest?

Implementing a PEO

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:

  • Select a project manager: Appoint one person to oversee the implementation process and keep track of key stakeholders, timelines, communication (both internally and with the software provider), etc.
  • Understand tech requirements: Find out what tech requirements and/or system integrations are necessary for this implementation. To determine this, discuss with your tech and/or IT teams as well as your software company point person. Pro Tip: Ask about this during the demo process so you have an understanding of the work involved before you sign any contracts.
  • Stay focused: Create a well-defined scope to keep things on track, on time and on budget.
  • Have regular check-ins: You’ll want to have regular touchpoints with your key stakeholders to make sure everything is running smoothly. Whether these happen daily, weekly or monthly depends on the scope of your implementation and the estimated timeline.
  • Communicate: Make sure to have a continuous dialogue with your software partner and internal stakeholders outside of your regular check-ins so that everyone is on the same page.

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.

Frequently Asked Questions About PEOs

What does PEO stand for? 

PEO stands for professional employment organization, an entity specifically setup to help smaller companies take care of their HR needs.

What is a professional employment organization?

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.

How does a professional employment organization work?

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.

What services do professional employment organizations provide?

Professional employment organizations can provide the following services:

  • HR consulting
  • Payroll processing
  • Tax filing
  • Workers’ comp
  • Health benefit
  • Employers’ practice and liability insurance
  • Employee onboarding
  • Record keeping
  • Safety and risk mitigation
  • Employee training and development

What are the pros and cons of a professional employment organization?

Pros of a professional employment organization include:

  • Complete takeover of HR responsibilities
  • Single sign-on to HR dashboard
  • Corporate-level benefits
  • Time tracking and PTO requests
  • Streamlined payroll processing
  • Risk-mitigation

While there are cons of a PEO, they are minimal, such as: 

  • Can get costly 
  • Aren’t always compliant with EEOC

Who should use a professional employment organization? 

Professional employment organizations are designed to be used by small and mid-sized businesses.

Final Advice on PEOs

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.

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