HR outsourcing for small and midsized businesses

A PEO is a form of HR outsourcing, but it operates through a co-employment model. General HR outsourcing typically involves contracting a provider to manage specific HR functions while your company remains the employer. With a PEO, the provider shares certain employer-related responsibilities, and your company continues to manage day-to-day operations and employee decisions.

Both solutions help reduce HR burden and flex to fit your business, whether you have an HR team in place or need more hands-on expertise. They’re built for different levels of support.

ADP TotalSource (PEO)

• Enter a co-employment relationship with shared HR responsibility
• Get a dedicated team of HR, payroll, benefits, safety and compliance experts
• Reduce day-to-day administrative workload across HR, payroll, benefits, compliance and workplace safety
• Help streamline HR processes while sharing responsibility for compliance and risk, and offering employees competitive benefits

ADP Comprehensive Services (Managed Services)

• Keep your current employer structure
• Choose support where you need it across HR, payroll, benefits and/or talent
• Get expert guidance and hands-on help, from fully managing functions like payroll or benefits to supporting more strategic HR and talent initiatives

In short: TotalSource is a full-service partnership that shares HR responsibilities and risk, while helping streamline operations across the board. Comprehensive Services gives you flexible options, from fully managing functions like payroll or benefits to providing strategic guidance in areas like HR and talent.

An HRO provider can support your existing staff with technology, administrative relief, guidance and best practices, freeing your team to focus on more strategic priorities instead of day-to-day administration.

A wide range of HR tasks can be outsourced, including payroll and tax administration, benefits administration, regulatory compliance, talent management, HR, employee training and development, and workforce policy support. These services can be tailored to fit your specific needs.

Common signs that you may be ready to outsource HR include spending too much time on HR administrative work, struggling to keep pace with changing regulations, growing faster than your HR capacity, operating without dedicated HR staff and/or wanting better benefits without having the resources to manage them in-house.

HR outsourcing costs vary by provider and scope of services. HRO providers typically charge based on the number of employees in a business and the specific services needed. PEO costs use two common models, a percentage of payroll or a per-employee monthly fee.

In practice, the terms are often used interchangeably. However, managed services usually refers to a more defined, ongoing, and accountable outsourcing arrangement.