Why Small Businesses Should Use a PEO

Experience the benefits of cost savings, compliance, and growth.





Small businesses can overcome many obstacles by using a PEO, or Professional Employer Organization, for their employees. Offloading the burdens that come with having employees allows small business owners to focus on the day-to-day business needs, rather than focusing on the complexities of HR and compliance.


Using a PEO is both a long term and short term benefit for small business owners. By alleviating the cost of hiring staff to handle HR and compliance, it frees up both time and capital to allocate to other strategic growth opportunities. A PEO also ensures that small businesses are compliant with state and federal regulations, which alleviates risks and costs of misclassifications and employment claims. Sadly, one employee claim can ruin a small business.


Small businesses who use a PEO have seen significant results, such as:

  • 7-9% faster growth

  • 50% more likely to stay in business

  • 10-14% lower employee turnover

Not only can using a PEO benefit a small business in the long-term, but it can have many positive short-term effects as well. Band of Hands handles all of the necessities that come with having employees, so that businesses can run smoothly and avoid costly mistakes having to do with compliance and misclassifications.

Payroll Services

Band of Hands is partnered with Paychex, a leading payroll provider, to make sure that employees are paid on time while accounting for their time sheets, attendance, vacation, pay stubs and more. By outsourcing payrolling services, business owners can focus on the growth and development of their business, while alleviating the chance of any costly errors in payroll management.

Compliance Issues

It’s a huge headache for small business owners to figure out how to navigate complex local and federal regulations. By outsourcing HR to the experts, you ensure that your business is in compliance with all relevant labor laws. This will help your business avoid any potential lawsuits down the road.

Employee Administration

PEOs handle a company’s employee administration services. These include:

  • Recruiting services

  • Employee onboarding and training

  • Development of employee handbooks

  • HR policies

By outsourcing these administrative tasks, small businesses free up time and resources, while offering a more positive employee experience.

Workers’ Compensation Claims

Most businesses are required to have workers’ compensation insurance to provide for employees who injure themselves on the job in the course of their duties. By using a PEO, you can ensure that your company is in line with the law and is able to handle any claims that may arise. Band of Hands is able to offer low rates for workers’ compensation insurance.

Co-Employment is Simpler than it Sounds

Co-employment is not a scary arrangement. You still decide who you want to hire, their pay rate, and who you want to keep and/or replace. In a co-employment scenario, you retain control of your company and employees.

A co-employment relationship simply means that the PEO is an employer of record for your company’s employees. This allows them to legally provide services to those employees and handle private information like payroll data and employee benefits. You are just offsetting the risk that comes with having employees by outsourcing those services to the PEO.

Outsource Your HR Needs Today

Though all businesses can benefit from outsourcing their HR needs to a PEO, small businesses with 5-50 employees will see the positive effects the quickest. If you are the owner of a small business, we at Band of Hands would love to help get you set up for success. Contact us at our website or call us at 858.284.3700. We take pride in helping you accomplish your business goals and being with you at every stage of your employee’s lifecycle.