By: Greg Modd

Companies often face tough decisions regarding managing their workforce in today's business world. They must choose whether to manage their HR in-house, use a human resource outsourcing (HRO) company, or partner with a professional employer organization (PEO). While both options offer advantages and disadvantages, understanding the differences is crucial for making the best decision for your business. In this blog, we will discuss the differences between HRO companies and PEOs, and provide a list of pros and cons for each option.

Human Resource Outsourcing (HRO) Companies

HRO companies are third-party service providers specializing in handling specific HR functions for businesses. These functions can range from payroll processing to benefits administration to employee relations. HRO companies allow businesses to outsource particular HR functions, which can help reduce overhead costs, improve efficiencies, and provide comprehensive expertise and support for HR-related matters.


Pros of HRO Companies


Cons of HRO Companies


Professional Employer Organizations (PEOs)

PEOs are HR outsourcing firms that offer a broader range of services than HRO companies. In addition to providing HR services such as payroll processing, benefits administration, and compliance, PEOs act as co-employers, taking on a portion of the employer's responsibilities for their client's employees.


Pros of PEOs


Cons of PEOs


Choosing the Right HR Solution for Your Business

Deciding between an HRO and a PEO can be a difficult choice for businesses. While both options offer advantages and disadvantages, leaders must make the best decision for their companies with a holistic understanding.