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A PEO (professional employer organization) service is a partnership model where a client company enters a co-employment relationship with a PEO. The PEO becomes the employer of record for tax and compliance purposes, while the client retains control over day-to-day business operations and company culture.

PEOs offer administrative services such as payroll, benefits packages, HR administration and compliance support. They help mid-sized businesses reduce the burden of time-consuming HR functions like unemployment insurance management, employee handbooks and new hire documentation. Accredited by organizations like the Employer Services Assurance Corporation (ESAC) and regulated under IRS standards, PEOs provide a scalable way to meet evolving business needs and employment laws.

There are three primary models of PEO work: full-service PEO, ASO (administrative services organization) and HRO (human resources outsourcing). Each supports HR outsourcing differently, depending on a company’s size, internal capabilities and desired level of involvement.

• Full-Service PEO: Involves a co-employment agreement. The PEO becomes the employer of record for tax and compliance purposes, handling paychecks, benefits like health insurance and employer responsibilities.

• ASO (Administrative Services Organization): Offers administrative support—such as payroll, performance management and HR services—without a co-employment relationship. The client company remains the employer of record.

• HRO (Human Resources Outsourcing): Provides targeted HR support or HR solutions. Businesses can outsource specific functions like recruiting, training or compliance audits without fully shifting administrative tasks.

Each model supports different needs based on the number of employees, in-house HR expertise and the level of control a company wants to retain. PEO clients often choose based on pricing, perks and the scope of comprehensive HR support a provider offers.

The isolved Network gives PEOs access to a secure, enterprise-grade HCM platform without building their own tech stack. People Cloud supports everything from payroll and HR to talent and benefits in one system—allowing PEO partners to grow revenue, expand services and retain full control of client relationships. With industry-leading capabilities and a modular platform design, partners can scale services based on their clients' business needs.

Founded as a COBRA solution over 37 years ago, isolved has evolved into a trusted HRO. The Network was launched more than a decade ago and its original founding partners are still active members. On average, Network partners grow 20% annually and see partner tenures of four years or more, with an industry-leading customer retention rate of 103%. The program supports all industries, with particular strength in healthcare, hospitality and business services.