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Why Should a Startup Work with a PEO?

4 min read

The early stages of starting a business can be the most challenging. From onboarding employees to establishing your brand, kickstarting a business involves a lot of groundwork that can be difficult to tackle on your own. 

If you’re a startup company in need of an extra hand, consider partnering with a professional employer organization or PEO. Mitigating the stress of starting a business, a PEO will take over your HR responsibilities and lighten your administrative workload. And as a result, you can focus more on what matters most: starting your business on the right foot. Read below for more reasons why your startup should work with a PEO. 

Improve Employee Management

Recruiting and retaining quality employees is vital to starting a successful business. With a star-studded team and an efficient onboarding process, you can lay a strong foundation for your business and hit the ground running. Among the many services a PEO offers, employee management is one of the most beneficial HR solutions. Generally, a PEO will assist with the following employee management tasks: 

Hiring and Onboarding

Your PEO will create a structure for attracting and onboarding new team members. From mapping out a new employee orientation to creating an employee handbook, PEOs will make your company’s hiring and onboarding process as smooth as possible. 

Retaining Talent

Once your PEO has helped recruit new talent, they’ll then prioritize employee retention.

By setting up employee benefits, cultivating a workplace culture, and implementing flexibility into day-to-day scheduling, a PEO will keep your employees sticking around for the long haul. 


Firing an employee is never easy. However, having a system in place for professional and polite terminations can soften the blow. An experienced PEO will implement termination protocols and find ways to identify workplace problems in their infancy so issues don’t escalate. 

Reduce HR Costs

It’s common for startup companies to run on a tight budget. And when it comes to budget cuts, HR programs are often the first thing to go. However, proper HR management can save your business money in the long run. From losing quality employees to failing compliance standards, the lack of HR services can sometimes put startups out of business. 

With an experienced PEO on your team, you can save big on HR administration. In fact, the average cost per employee for HR services is 35% lower for PEO clients than non-PEO affiliated employees, according to the National Association of Professional Employer Organizations (NAPEO). 

Maintain Compliance

A business in its infancy has a lot to learn when it comes to local, state, and national employment laws. With 38 government-level, employment-related agencies and departments to keep track of, you might need an expert to help you get started. By teaming up with a PEO, you can ensure your business complies with government regulations. From obtaining federal identification numbers to setting up a working payroll system, a PEO will ensure your business meets compliance standards and mitigate the risk of any legal mishaps. 

Boost Revenue

While a PEO won’t drive direct sales for your business, it will generate excellent opportunity costs. By lightening your administrative workload and taking the reins on HR processes, a PEO will give you more time to focus on your business’s core functions. As a business owner, this means you can dedicate all of your attention to growing your business and generating more revenue. With the extra free time in your schedule and reduced employee-related costs, you can maximize your profit potential and reach a new level of success. 

Stay in Business 

A lot of startup companies don’t make it off the ground. Whether it be a lack of sales or poor employee management, there are several reasons why a startup might never make it past its early stages. A PEO improves your likelihood of staying in business by reducing expenses and taking care of HR needs. According to NAPEO, companies that use a PEO are 50% more likely to stay in business from one year to the next. That said, a PEO might be the best investment for your business’s long-term success. 

Simplify Your Business with 

At, we make it easier to find the perfect PEO provider for your business. With access to some of the largest PEOs in the country, our agents provide high-performing options that will unlock your business’s true potential. If you’re ready to take your business to new heights, connect with our team today to shop PEO quotes and receive competitive pricing within 24-72 hours!

Ready to take your business to the next level?

Contact us today to learn more about how we can help you achieve your goals.

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