It starts with understanding the nuances and power of leveraging an HRO to navigate the process of researching the best PEO services for your company. 

As the owner and lead HR Consultant at Elevate Results Consulting, I frequently encounter clients navigating the complex world of human resources solutions—particularly when evaluating whether to work with a PEO (Professional Employer Organization).  

I help organizations understand the essential differences between working with an HRO (Human Resources Outsourcing) solution and a PEO (Professional Employer Organization), and how these two solutions complement each other to help businesses tackle skyrocketing operational efficiencies and unforeseen challenges. I also assist clients, as an HRO, in navigating the process of finding and selecting the best PEO solution to meet their company’s functional HR needs and goals. 

In this article, I’ll break down what an HRO and a PEO are at their core—the functions of each. I also share my expertise and provide a practical, step-by-step approach to evaluating a PEO—a process my team at Elevate Results Consulting uses to guide clients through this important decision every day. 

It starts with a clear understanding of these two service solutions. You may have heard the acronyms before, but do you really understand what they mean? How each functions? 

What is an HRO vs. a PEO? 

HRO: Human Resources Outsourcing refers to outsourcing specific HR functions—like payroll, recruiting, benefits administration, or compliance—while the employer retains all legal responsibilities for the workforce. 

PEO: Professional Employer Organization enters into a co-employment relationship with a business, sharing many employer responsibilities such as payroll, benefits, workers’ compensation, and tax administration. The PEO essentially becomes the employer of record for certain administrative and compliance functions. 

A Simplified breakdown of an HRO vs. PEO 

 HRO vs PEO

The Key Steps Elevate Results Consulting Uses to Evaluate a PEO 

Having helped many clients transition between PEOs and navigate this decision, I can assure you there are many moving pieces. Here’s our process to determine if and when a PEO is the right fit—and which one to choose. 

  1. Evaluate Your Current Situation

  • Understand your current systems and tools: Make sure to evaluate your HRIS, payroll, benefits, and compliance tools to understand their features and functions. Are there features you’re not utilizing for your business? 
  • Document desired features: Engage your leadership and HR teams to list must-have features in a future platform
  • Review current costs: Analyze costs and see if any underutilized services could justify staying with your current PEO

  1. Interview Potential PEOs

  • Shortlist at least 2–3 providers that meet your initial feature requirements
  • Compare platform features vs. add-on costs: Distinguish between base services and premium upgrades
  • Assess integration and ease of use: The best PEOs offer seamless, intuitive HRIS platforms

  1. Analyze Pricing Structures

  • Compare total cost of ownership: Incorporate base fees, service charges, and additional module costs
  • Negotiate with your current PEO: Armed with competitive quotes, explore if they can reduce costs or enhance services
  • Understand termination fees and transition costs, including impacts on: 
    • 401(k) plans and benefit administration 
    • Workers’ compensation policies 
    • Payroll tax responsibilities (ensuring taxes already paid are properly credited) 

  1. Decide with a Holistic View

  • The decision is not purely financial—consider time, staffing resources, and cultural impacts
  • Include all relevant stakeholders, especially those who will manage onboarding and daily HR functions
  • Set realistic timelines—transitions always take longer than expected

  1. Plan Implementation

  • Collaborate with your new PEO on a detailed transition timeline
  • Notify your current PEO in advance as per your service agreement (commonly 30/60/90 days)
  • Prepare employee communications and tax authorities accordingly

  1. Employee Rollout

  • Ensure all employees complete necessary paperwork: new I-9s, W-4s, benefit enrollments
  • Distribute updated handbooks and policies for acknowledgment
  • Process the first payroll under the new system with close oversight

 

Why Partner with Elevate Results Consulting? 

Our expertise lies in guiding organizations through these nuanced decisions—whether you’re considering your first PEO or transitioning to a better fit. We tailor our process to your unique organizational needs, helping you maximize HR efficiencies while mitigating hidden risks. 

If you’re interested in exploring whether a PEO or HRO fits your business or want to evaluate your existing arrangement for potential savings and service improvements, let’s talk. 

Ready to optimize your HR strategy and take your business to the next level?  

Contact us for a complimentary discovery call to explore how Elevate Results Consulting can help you evaluate and select the right HR partner. 

👉 Visit: ElevateResultsConsulting.com/contact 

 

Resources and Further Reading 

(These sources provide foundational knowledge while avoiding direct competitive conflict with Elevate Results Consulting.)