This article is supported by PEO Spectrum, the Resource for Shopping, and Comparing HR Outsourcing and Professional Employer Organization providers.

By: Thomas Farrell

Are you currently shopping or working with an employee leasing company? 

Perhaps you are looking into a Professional Employer Organization?

Surely you’ve heard about the benefits of a PEO, ASO, or HR Outsourcing firm...

If you said “yes” just once then read on, this article will help you to understand the similarities and differences between each of these terms.

Employee Leasing, Professional Employer Organization, and PEO, all mean the same exact thing. Particularly, they all refer to an HR Outsourcing company that partakes in coemployment with its clients, which fundamentally means two companies employing the same employee base and splitting the responsibilities of properly managing them.

HR Outsourcing is a broad definition that refers to a wide range of companies and services that all have one thing in common; they help companies offload some part of the responsibilities necessary to manage their workforce. The simplest and most common is a payroll processing company such as ADP, the most comprehensive and less known would be Administaff, which is considered to be a PEO. PEOs provide an array of services including payroll processing, workers comp insurance, employee benefit packages, HR support, and even 401(k).

An Administrative Service Organization or, ASO, can be considered as an HR Outsourcing firm, but since ASOs do not coemploy with their clients, they are not a PEO. ASOs usually provide payroll processing, HR support, and can administer workers comp insurance, employee benefit packages, and 401(k).

Notice the difference here in the word "administer", as opposed to "provide" when we referred to PEOs. This is due to the fact that PEOs offer clients their own benefit plans and workers comp insurance through coemployment, whereas ASOs only help administer policies that you can attain through a normal broker.