Introduction to Professional Employer Organizations (PEOs): Enhancing Efficiency for Architects and Engineers

Title: Introduction to Professional Employer Organizations (PEOs): Enhancing Efficiency for Architects & Engineers

Who it’s for: Architecture and engineering firm leaders who want to streamline HR operations, control costs, and scale more effectively.

What you’ll learn:

• The fundamentals of what a PEO is, including co-employment and how it works.
• How PEOs help architects & engineers reduce administrative burden around payroll, benefits, compliance, and risk.
• Key efficiency gains: faster hiring, better retention, access to higher-level benefits, and predictable HR costs.
• Specific challenges A&E firms face (project-based staffing, multi-state sites, safety/regulation, turnover) and how PEOs address them.
• How to evaluate whether your firm is ready for a PEO — and how to choose the right PEO partner.

Why it matters now:
With talent shortages, regulatory complexity, and rising benefits costs, architecture & engineering firms must focus on their core competencies—design, delivery, innovation—rather than getting bogged down in HR logistics. A PEO gives you the operational freedom to lead and grow.

Host (Emma):
I’m going to take this time to introduce our guest speaker, Dan Sheridan. He’ll be presenting on PEOs today. The chat box is open, so if you have any questions along the way, I’ll be monitoring them.

If we don’t get to your questions during the presentation, there will be time for Q&A at the end. I’ll make sure to keep a note of all the questions that are asked, and we’ll also provide Dan’s contact information if you have any follow-up questions about the presentation or anything discussed today.

With that, Dan, I’ll turn it over to you.

Dan:
Thanks, Emma. I appreciate you having me today.

Hello everyone. My name is Dan Sheridan. I am the founder and CEO of PEO Blueprint, a national PEO brokerage firm. I work with small and midsize employers throughout the country to educate them on PEOs and help them find the right PEO and HR outsourcing partner.

A little background on me and why I’m qualified to do this: I spent 15 years running one of the largest and most successful white-collar PEOs in the country, based in New Jersey, called Extensis. I spent a lot of time there and developed a deep understanding of all aspects of PEOs. My goal today is to pull back the curtain a bit and help you better understand how PEOs work.

We’re going to do that through today’s webinar: “Introduction to Professional Employer Organizations (PEOs): Enhancing Efficiency for Architects and Engineers.” It’s essentially a comprehensive 101 on how to streamline operations and reduce administration for architecture and engineering practices.

Webinar Overview

Today, I’m not going to read every word on the slides, and I’ll try to make the presentation as engaging as possible. Some of this can get technical, but my goal is to give you practical takeaways.

By the end of this webinar, you should have a solid foundation and understanding of PEOs. We’ll focus on how PEOs help simplify the complexities of HR administration and compliance, while also significantly reducing costs.

We’ll talk about how a PEO can give you peace of mind and allow you to focus your time, energy, and resources on revenue-generating aspects of your business—rather than being buried in paperwork and office tasks.

As a PEO 101, we’ll also cover how PEOs reduce compliance risk, eliminate administrative busywork, and enhance retention and employee engagement.

Learning Objectives

By the time we’re done, you should:

• Understand the core functions of a PEO, especially around payroll, benefits, compliance, and HR outsourcing.
• Understand the unique financial and operational benefits of a PEO partnership for architects and engineers.
• Have a good grasp of the unique HR challenges in your industry.
• Understand the strategy and process for evaluating, selecting, and potentially implementing a PEO partnership for your organization.

Today’s Agenda

We’ll cover:

1. An introduction to PEOs and their core functions.
2. The key challenges you face as architecture and engineering firms—and how PEOs help mitigate those with specific strategies.
3. The financial and operational benefits of a PEO relationship.
4. Strategies for selecting and implementing a PEO.
5. Real-world case studies showing how this works in practice.
6. Key takeaways and Q&A.

What is a PEO?

A PEO is a Professional Employer Organization—essentially an HR outsourcing partner.

When you partner with a PEO, the PEO becomes the employer of record (also called the administrative employer) for tax and benefits purposes, while you retain control over day-to-day management, operations, and directing your employees’ work.

This relationship is called co-employment. In a co-employment model, you and the PEO share responsibilities:

• The PEO handles compliance, HR administration, payroll, and benefits.
• You maintain oversight of operations, work direction, finances, and go-to-market strategy.

Industry overview:

• There are roughly 600 PEOs in the U.S. today.
• They serve more than 200,000 businesses and nearly 4 million worksite employees.
• The industry is large and growing, historically at around 15–20% per year.
• PEOs now manage close to $500 billion in payroll revenue.
• Most clients are small employers—often under 50 employees. The average PEO client has about 25 worksite employees.

For architects and engineers, PEOs are especially relevant because your work is project-driven, and administrative tasks can distract you from your core business: design, engineering, and innovation. That’s where a PEO adds value.

History and Evolution of PEOs

PEOs started in the 1970s and 1980s as employee leasing companies. Employers would technically terminate employees, the leasing company would hire them, and then lease them back—primarily to help with workers’ comp coverage, especially in higher-risk industries and regions like Florida.

Over time, the model evolved:

• The focus expanded from blue-collar workers’ comp to white-collar firms.
• Rising health insurance costs and the Affordable Care Act (ACA) drove employers to seek alternatives to the small-group health market. PEOs, with their large-group health plans, became very attractive.
• Accreditation and regulation improved. PEOs became more mainstream.
• In the 2000s, PEOs gained federal recognition. The IRS created a Certified PEO program. You can see a list of certified PEOs on the IRS website.
• PEOs increasingly focused on white-collar, high-average-wage professional service firms—like financial services, architecture, and engineering—where there’s a real war for talent and a need to offer better benefits at better costs.

HR technology has also played a huge role. PEOs deliver integrated HR platforms that include payroll, benefits, taxes, and retirement plans in a single system—rather than you having separate vendors for each. For a small or midsize firm, that’s a major simplification.

Remote work and hiring across multiple states have also accelerated PEO adoption. Many A&E firms now hire talent outside their local markets, which creates multi-state compliance and benefits challenges that PEOs are well-equipped to handle.

Core Functions of a PEO

1. Recruitment and Onboarding
Modern PEOs often have recruiting teams and Recruitment Process Outsourcing (RPO) solutions. They provide:

• Integrated applicant tracking systems (ATS)
• Data and reporting
• Reduced time-to-hire and lower recruiting costs

Because PEOs earn revenue when you add employees, they’re incentivized to help you hire efficiently and successfully.

2. Performance Management and Employee Development
PEOs support:

• Onboarding and training
• Career pathing
• Learning management systems (LMS)
• Licensing and continuing education tracking for design and licensed professionals

3. Employee Relations
Employee relations issues are time-consuming and risky. PEOs help with:

• Handling disputes
• Improving engagement and satisfaction
• Managing remote work policies and hybrid environments

Payroll and Benefits

Payroll and benefits are tightly linked, and PEOs bring them together in one platform.

Payroll:

• Processing payroll
• Managing federal, state, and local payroll tax filings
• Multi-state compliance
• Self-service access for employees (pay stubs, W-2s, etc.) via web and mobile apps

This is especially valuable when employees need quick access to documentation for mortgages, car loans, or other financial needs.

Benefits Administration:
PEOs provide:

• High-tech benefits administration integrated into the HRIS
• A team of benefits experts and HR support
• Access to large-group, Fortune 500-style health plans: medical, dental, vision, life, disability, 401(k), and more (including things like identity protection and pet insurance in some cases)

Because PEOs aggregate many employers, they often secure significantly lower healthcare rates than small firms can get on their own.

I’ve seen clients save anywhere from 10–20% on health insurance—and in some cases up to 50%. For example, one client with 11 employees moved to a PEO and saved about $60,000 a year—roughly $6,000 per worksite employee—while gaining access to better benefits and all the additional PEO services.

Compliance and Risk Management

PEOs are experts in labor law and compliance, including:

• FLSA (Fair Labor Standards Act)
• FMLA (Family and Medical Leave Act)
• ADA (Americans with Disabilities Act)
• OSHA regulations
• Federal, state, and local employment laws

Instead of you trying to become an expert on all of this, you can partner with a PEO whose full-time job is staying on top of these issues.

On the risk management side, PEOs support:

• Safety programs and training
• Workers’ comp claims management
• “Pay-as-you-go” workers’ comp, where premiums are based on actual wages each pay period, reducing the need for large deposits and year-end audits

For architects and engineers, PEOs can also provide support around:

• Jobsite safety and OSHA coaching
• Subcontractor risk management
• Cybersecurity guidance (e.g., around CAD files and sensitive project data)
• Compliance with sustainability or LEED-related requirements

Challenges A&E Firms Face

From an HR perspective, architecture and engineering firms typically struggle with:

• Talent acquisition and retention: Competing with large firms and tech companies for specialized talent.
• Workers’ comp and safety: High-risk activities, jobsite exposure, and subcontractor risk.
• Project-based staffing: Workloads that ebb and flow with projects, creating staffing and budgeting challenges.
• Regulatory compliance: Multi-jurisdictional issues, delays, and increased costs.
• Remote work: Added HR complexity and administration.
• Economic volatility: Uncertainty around workload, hiring, and benefits costs.

How PEOs Help Mitigate These Challenges

Talent & Staffing:

• Access to RPO and recruiting technology
• Better benefit plans at lower cost, making your offer more competitive
• Improved retention and engagement through benefits, HR support, and structured HR practices
• Ability to hire in multiple states while staying compliant

Risk & Compliance:

• Lower workers’ comp rates through large, high-deductible programs
• Pay-as-you-go workers’ comp with reduced audit risk
• Expert claims management and safety programs
• Automated OSHA and ADA tracking
• Reduced risk of fines and penalties

Agility and Growth:
By reducing admin and compliance burden, a PEO frees your firm to focus on:

• Innovation
• Project delivery
• Client service
• Business development

NAPEO (the National Association of Professional Employer Organizations) has data showing that small employers using PEOs grow faster and have lower failure rates. Part of that is the PEO’s impact, and part is that these are companies actively looking for better, more efficient ways to operate.

Financial Benefits

Key financial benefits of partnering with a PEO include:

• Healthcare savings: Often 10–20%, sometimes up to 50%, with more stable annual renewals (typically in the 8–12% range) and, in some cases, renewal rate caps for more predictability.
• Reduced admin overhead: You gain access to a team of HR, payroll, benefits, risk, and compliance experts without having to build that full team in-house. This doesn’t necessarily mean replacing staff—it often means your existing people can scale more effectively.
• Cash flow improvements: Lower deposits, pay-as-you-go workers’ comp, and fewer surprise audits or penalties.
• Retention and productivity: Better benefits and structured HR support increase retention, engagement, and productivity—reducing the high costs of turnover and lost client relationships.

Additional Operational Benefits

• Shared liability and risk: In co-employment, the PEO shares certain employment-related risks. They’re incentivized to minimize exposure and respond quickly to issues.
• Core focus: You can redirect your time and your leaders’ time away from HR firefighting and back to projects, clients, and growth.
• Scalability: PEOs help you grow without proportionally growing your internal HR department.
• Employee satisfaction: Better benefits, clearer policies, and better HR support lead to happier, more engaged employees—especially important in remote and hybrid environments.
• Industry-specific support: For A&E, PEOs can help manage subcontractor exposure, licensing, CE credits, and other regulatory requirements.

Pros and Cons of PEOs

Pros:

• Cost efficiency (especially around benefits and insurance)
• Compliance expertise and risk reduction
• Access to better benefits and HR technology
• Reduced administration and increased scalability

Potential Cons / Considerations:

• Choosing the right partner is critical. Not all PEOs are the same.
• The value may be more about HR support than pure cost savings in some cases.
• User experience with HR technology can vary.
• Cultural fit and service model: you need to feel comfortable with the team and how they support you.

That’s why evaluation and selection are so important.

Selecting a PEO

If you try to do this yourself, you’ll likely talk with 3–5 PEOs individually, repeating the same information and running multiple separate sales processes.

Instead, I recommend working with a PEO broker who:

• Performs an HR audit with you
• Helps you understand current costs and gaps
• Identifies PEOs that specialize in professional services and A&E firms
• Requests quotes broadly and then narrows the field to the 3–5 best fits

Key evaluation criteria include:

• PEO experience with architecture and engineering firms
• Tech demos (HRIS, payroll, benefits, and reporting)
• Service model: who you’ll work with, how you communicate, and what support looks like day to day
• Credentials:
  • ESAC accreditation
  • IRS Certified PEO status
  • NAPEO membership
• Financial stability
• References and retention data, especially for A&E clients

You should also ask for A&E-specific benchmarking—hiring trends, compensation data, retention benchmarks, and so on—to see whether the PEO truly understands your space.

Pricing and Contracts

PEOs typically price in one of two ways:

1. Bundled pricing (percentage of payroll):
   • One percentage applied to wages, covering most services.
   • As wages and taxes go up, your PEO fees go up.
   • Less transparent; I generally don’t recommend this model.
2. Unbundled, transparent pricing (per-employee, per-month):
   • Clear line items for admin fees, benefits, workers’ comp, etc.
   • Flat admin fees typically ranging from ~$80 to ~$200 per employee per month, depending on size and complexity.

Contract review is critical:

• Understand additional fees (implementation, check fees, off-cycle payroll, etc.).
• Know the termination terms and notice requirements.
• Check for EPLI coverage (Employment Practices Liability Insurance) and whether third-party claims are covered.

Implementation and Best Practices

Once you select a PEO:

• Review and negotiate the contract.
• Communicate clearly with employees about what’s changing and why—emphasize the investment you’re making in them (better benefits, better tools, more support).
• Work with the implementation team to:
  • Migrate payroll data
  • Set up benefits, contribution strategies, and waiting periods
  • Configure HRIS and workflows

I recommend allowing 6–8 weeks for implementation to reduce stress and allow for smooth onboarding and open enrollment.

After go-live:

• Run the first few payrolls with tight oversight from the implementation and payroll teams.
• Schedule regular check-ins (monthly or quarterly) with your PEO to track progress and refine your HR strategy.

Measuring ROI and Long-Term Value

Track:

• Initial and annual cost savings (healthcare, workers’ comp, admin time)
• Growth rates and ability to scale
• Turnover and retention
• Employee satisfaction and engagement (via surveys and NPS)
• HR and compliance incidents (or the lack of them)

Revisit the market periodically to ensure you’re still getting strong value—without constantly switching just for minor changes.

Case Studies (High-Level)

Case Study 1 – Architecture Firm (~50 Employees):

• Issues: HR overload, compliance risk, rising costs.
• PEO Solution: Implemented HRIS, reduced vendors, added recruitment support and HR guidance.
• Results: 30% reduction in administrative workload; 20% improvement in retention; stronger ability to scale with standardized processes.

Case Study 2 – Engineering Firm with Workers’ Comp Challenges:

• Issues: High-risk class codes, challenging states, rising claims and premiums.
• PEO Solution: Lower-cost pay-as-you-go workers’ comp, safety training, and aggressive claims management.
• Results: 25% reduction in claims, improved cash flow, and confidence to expand into new states and markets.

Conclusion

To summarize:

• PEOs provide access to scaled HR functions, technology, and expertise that are hard to build in-house—especially for small and midsize A&E firms.
• They address specific pain points for architects and engineers: compliance, workers’ comp, benefits, multi-state hiring, and project-based staffing.
• They deliver financial benefits (cost savings, stability, and cash flow improvements) and operational benefits (better focus, scalability, and talent support).

Ultimately, a strong PEO partnership can help you become an employer of choice—able to attract and retain top talent, grow more efficiently, and reduce risk.

Host (Emma):
Feel free to leave any questions in the chat box and I can read them aloud. We’ll wait a couple of minutes to see if any questions come in.

In the meantime, I’m putting my email address in the chat for anyone who wants credit. If you’d like, I can report your license number to AIA directly or send you a certificate of completion. This session is being recorded and will be available on our website for you to review. We also have a podcast episode with Dan if you’d like more information.

We have one question: “Is there a minimum number of employees? Is there a solution for a firm with two employees?”

Dan:
That’s a good question.

Typically, most PEOs like to see at least 10 employees enrolled in healthcare to qualify. That said, there are PEOs that specialize in micro-firms—companies smaller than that. There are PEOs that can work with firms as small as two employees and still provide a full solution.

Another question: “Can you do this as a mix—with some on the PEO and some remaining as regular employees?”

All of your people are still your employees. When you enter into a PEO partnership, typically all employees enter the co-employment relationship. However, some companies structure things so that one entity or division is on the PEO and another is not. I have seen organizations carve it up that way across entities.

Emma:
Just a quick clarification as well: if you’d like a certificate or AIA credit, please email me rather than putting your information in the chat. The chat disappears after the webinar ends, and it’s easier to track via email.

My email is in the chat box—send me a note and I’ll be happy to provide your certificate or report your credit.

It doesn’t look like we have any more questions, so thank you, Dan. I appreciate you taking the time.

If anyone has questions for Dan, his contact information is on the screen, and I’ll also provide the presentation or any follow-up information you need.

I hope everyone has a great day, and thank you for joining us.