What is the difference between HR outsourcing and a PEO?

Human Resources outsourcing (HRO) is when you contract with an independent provider to handle some or all of your HR functions. You can contract for a variety of services, from basic HR to more robust and strategic offerings. HRO companies typically allow clients to scale and customize their services according to their needs.

A PEO is a co-employment model where the PEO becomes the employer of record for your employees, and assumes certain employer responsibilities on your behalf. A PEO administers HR functions and frees you to focus on your business. This can be a great help to small and mid-sized, newer, or growing businesses.

ADP Editorial Team The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.