A PEO co-employs a company's workforce, allowing the company to focus on its core business while the PEO handles HR and administrative functions. This arrangement is particularly beneficial for small to medium-sized businesses.

Practical Example of a PEO:

A small business partners with a PEO to manage its HR functions. The PEO administers employee benefits, processes payroll, ensures compliance with employment laws, and provides HR consultancy, freeing the business to focus on growth and operations.

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