prə.ˈfe.šə.nəl em.ˌplɔiər ˌɔhr.ɡə.nə.ˈzeiš.n̩ / Professional Employer Organization (PEO)
Definition
A professional employer organization (PEO) is an external party that provides services for employee management.
Also known as an employee leasing company, a PEO directly hires employees for other companies that make up its clientele and combines them into one large talent pool.
Both PEO and its clients share responsibilities over their employees once they enter into a co-employment agreement. The latter manages the work performed by its employees, while the former takes over administrative functions, such as recruitment, benefits management, and payroll processing.
