What is a Professional Employer Organization (PEO)?

Home Blogs
What is a Professional Employer Organization (PEO)?

What is a Professional Employer Organization (PEO)?

What is a PEO? Leasing staff from a Professional Employer Organizations (PEO) company in the Philippines is becoming a popular alternative to direct employment (hiring in-house) for companies of all shapes and sizes.

Companies often need assistance managing increasingly complex employee related issues such as health benefits, workers' compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. If they contract with a PEO, the PEO assumes these responsibilities and provides expertise in HR management. This allows the PEO client to concentrate on the operational and revenue-producing side of its operations, they can spend more time doing strategic work, and less time doing busy work.

A PEO provides integrated services to effectively manage critical human resource responsibilities and employer risks for clients. A PEO delivers these services by establishing and maintaining an employer relationship with the employees at the client's worksite and by contractually assuming certain employer rights, responsibilities, and risk.

What is a Professional Employer Organization (PEO)?

Professional employer organizations (PEOs) enable clients to cost-effectively outsource the management of HR, employee benefits, payroll and workers' compensation. PEO clients focus on their core competencies to maintain and grow their bottom line. PEOs with the real employer in a co-employment arrangement. The leased staff work for the client, and they must abide by all the policies and requisites set by the client, but they are on the PEOs payroll.

Benefits of leasing staff from a PEO

In an increasingly globalised world, many companies are turning away from PEOs in New York City and PEO companies in Florida, and instead hiring virtual staff in the Philippines from a Filipino PEO. Leasing staff from a PEO company in Philippines has numerous benefits.


Let the PEO take care of all the HR headaches, such as placing advertisements for open positions, recruiting, interviewing, testing, training and day-to-day management of the employee. Simply put, its less hassle and more convenient in many cases to simple lease a virtual employee in the Philippines.


Labor cost in Philippines is much lesser than that in the US, UK, European countries and Australia, New Zealand among a few others. Leasing staff in the Philippines, can save thousands of dollars every month. Companies can lease 2-3 staff from a PEO for the price of hiring one person in-house.


PEOs are a good choice for companies that need a flexible workforce, because they are highly seasonal. Many companies lease staff during peak season, like Christmas, to handle a momentary spike in demand. In addition, leased staff from a PEO can cater to a huge range of tasks.


Many companies and top level executives in developed countries have had to deal with lawsuits from their in-house employees. We live in a litigious world, where employment related lawsuits are on the rise. With a PEO, you mitigate those risks and lessen your exposure to frivolous lawsuits. You can also mitigate against ever increasing healthcare costs and benefits you must pay your employees.


Talent is the lifeblood of any organization. Companies must hire the best talent if they are to survive and thrive in today's ultra-competitive business environment. PEOs can give a company greater access to low cost talent.

Change Catalyst

Leased staff provide a fresh set of eyes. They bring new ideas and energy, and a and an objective opinion - often resulting in innovation, and positive change within an organization. In short, they can shake things up for the better.

Sharpen Focus

Hiring and firing is a big job which requires lots of time and energy. Not having to deal with these hassles allows a business owner to sharpen their focus on core business objectives, such as landing more clients and improving profitability. Leave the HR headaches to a PEO, so that you can be more focused on the core areas of your business.

In conclusion, there are many precious benefits of hiring a staff leasing or PEO company in Philippines. Therefore, it should come of no surprise that leasing staff from PEO companies in the Philippines is becoming more and more popular for companies of all shapes and sizes.

Ike Stranathan

Ike Stranathan

Ike Stranathan founded STAFFVIRTUAL in 2009 after moving to the Philippines from California. Ike lives just a block from his offices in Makati, Philippines, and is passionate about helping companies achieve dynamic growth by outsourcing.

Most Popular

Let's Connect!

Get started or book a call with us.