What is a professional employer organization (PEO)?

A professional employer organization (PEO) specializes in leasing employees to businesses, which allows companies to outsource various human resource functions. This arrangement typically involves the PEO assuming responsibility for employee-related tasks such as payroll, benefits administration, and worker's compensation. By doing so, the PEO enables businesses to focus more on their core operations while ensuring compliance with employment laws and regulations. This makes the PEO a valuable partner for small to mid-sized companies that may not have the resources to manage these HR functions effectively.

The other options—offering insurance services, managing marketing strategies, and providing financial consulting—do not encapsulate the primary function of a PEO, which is centered around employee leasing and HR management rather than these other business services.