---
title: "What is the difference between HR outsourcing and a PEO? | ADP"
description: "Human Resources outsourcing (HRO) is when you contract with an independent provider to handle some or all of your HR functions."
---

FAQ

# What is the difference between HR outsourcing and a PEO?

1.  [PEO](/what-we-offer/hr-outsourcing-and-peo/professional-employer-organization)
2.  [What is a PEO](/resources/articles-and-insights/articles/p/peo-what-is-a-peo-professional-employer-organization)
3.  HR Outsourcing and PEO Difference

[Human Resources outsourcing](/what-we-offer/hr-outsourcing-and-peo/hr-outsourcing) (HRO) is when you contract with an independent provider to handle some or all of your [HR functions](/resources/articles-and-insights/articles/h/hr-strategy). You can contract for a variety of services, from basic HR to more robust and strategic offerings. [HRO companies](/resources/articles-and-insights/articles/w/what-is-hro) typically allow clients to scale and customize their services according to their needs.

A [PEO](/resources/articles-and-insights/articles/p/peo-what-is-a-peo-professional-employer-organization) is a [co-employment](/resources/articles-and-insights/articles/p/peo-what-is-co-employment) model where the PEO becomes the employer of record for your employees, and assumes certain employer responsibilities on your behalf. A PEO administers HR functions and frees you to focus on your business. This can be a great help to small and mid-sized, newer, or growing businesses.

![ADP Editorial Team](/-/media/adp/resourcehub/images/authors/resourcehub_headshot_defaultlogo_250w_en.png?h=250&iar=0&w=250&rev=bd3d17f5038e4ff3aef554d2642143cf&hash=52D2290FEA29314404E1E73B03D0D26D)

[ADP Editorial Team](/resources/authors/a/adp-editorial-team)The ADP editorial team is comprised of human resource professionals with extensive experience solving complex HR challenges for businesses of all sizes.

## Recommended for you

-   [The benefits of outsourcing HR services](/resources/articles-and-insights/articles/b/benefits-of-outsourcing-hr-services)
-   [Take payroll and HR administration off your plate. And reap the rewards.](/resources/articles-and-insights/articles/t/the-business-case-for-outsourcing-hr)
-   [Advantages of PEOs](/resources/articles-and-insights/articles/p/peo-advantages)

### ADP TotalSource®

  

**Robert Cooper,**  
President & CEO  
_Johnson, Morgan & White_

### Choosing the Right PEO for Your Business: PEO Buyer’s Guide

[Download Now](/resources/articles-and-insights/articles/c/choosing-the-right-peo-for-your-business)

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