A PEO creates a co-employment relationship, where the PEO becomes the employer of record for tax and compliance purposes.
What PEOs Offer
Payroll processing and tax compliance
Workers’ compensation coverage
HR administration and compliance support
Employee benefits at group rates
Why Choose a PEO?
Lower SUTA rates if your business has high turnover
Access to a master workers’ comp policy
Transfer of compliance liability
Expert HR and risk management support
An ASO provides HR and payroll support similar to a PEO, but without a co-employment arrangement. You remain the employer of record, filing taxes under your own FEIN, while outsourcing critical HR tasks to industry experts.
What ASOs Offer
Payroll and tax filing support
Benefits and workers’ compensation administration
Employee record management
HR and compliance guidance
Why Choose an ASO?
Like the PEO model, the ASO option provides a bundled suite of HR and administrative services to help you manage your business more effectively. While it does not create a co-employment relationship, it is designed to minimize risks and liabilities by outsourcing employment-related tasks to experts.
Retain existing insurance carriers and brokers
Maintain your own SUTA rate
Gain administrative support while keeping full control
Ideal for companies with internal HR teams
Businesses that Benefit the most from ASOs Include:
Companies with a dedicated HR team that need extra support as they scale
Businesses wanting to tailor HR solutions without overhauling their existing systems
Organizations that prefer to keep existing insurance carriers and broker relationships while outsourcing administration
Larger companies that can leverage large-group health plan status for better benefits and terms
No Co-Employment Relationship
Some business owners are wary of PEOs due to shared employer responsibilities. With an ASO, you retain full employer-of-record status while still receiving professional HR and compliance support.
Retain Current Benefits & Carriers
If you’re satisfied with your current benefits or workers’ comp provider, ASOs let you keep those relationships while outsourcing administration.
Maintain a Low SUTA Rate
Businesses with low turnover and low SUTA rates retain those advantages, while gaining support for unemployment claims and compliance.
The ASO model provides flexibility and expertise without requiring you to give up control of your workforce. It is particularly effective for companies that:
Want scalable HR support
Have unique benefit needs or carrier preferences
Prefer to retain compliance authority while outsourcing admin burdens
Primary Services Offered by ASOs:
Payroll processing and tax filing
Employee data management
Benefits and workers’ comp administration
Compliance and HR recordkeeping
Additionally, ASOs streamline HR processes, optimize administrative functions, and ensure compliance with state and federal laws, allowing companies to run more efficiently while staying protected.
HRO is often seen as the à la carte option. Instead of comprehensive HR outsourcing, you choose specific HR functions to outsource—such as recruiting, training, or performance management.
What HROs Offer
Recruitment and onboarding services
Employee training and development
Performance management systems
Employee relations support
Why Choose HRO?
Highly customizable
Scalable for growing companies
Allows internal HR teams to stay focused on strategy
What are the benefits of HR outsourcing?
Whether through PEO, ASO, or HRO, outsourcing HR helps businesses:
Reduce costs and administrative burdens
Access HR and compliance expertise
Gain competitive employee benefits
Improve efficiency and scalability
PEO Benefits:
Comprehensive HR support
Reduced administrative burden
Access to competitive employee benefits
Enhanced compliance assistance
Flexibility to choose specific services
Full control over employee management
Cost-effective for businesses that don't need comprehensive HR support
Customizable HR solutions
Scalability to meet changing business needs
Focus on strategic HR functions
By outsourcing HR functions, companies can focus on growth, strategy, and core business goals instead of getting bogged down in compliance and paperwork. Choosing between PEO, ASO, and HRO depends on your company's size, needs, and goals. A PEO may be ideal for small to mid-sized businesses seeking comprehensive HR support and competitive benefits. An ASO is suitable for companies that want specific HR services while retaining full control over their workforce. HRO is a great option for larger businesses looking to outsource specific HR functions and focus on strategic initiatives.
Drawing on our deep experience in PEO, HRO, and ASO, Dinsmore Steele guides businesses in navigating the complexities of choosing between a PEO, HRO, and ASO. Through personalized assistance and strategic insights based on unique organizational needs and budget considerations, Dinsmore Steele simplifies decision-making, empowering businesses to select the most suitable solution for their specific requirements.
Meet my Advisor