Why companies need to rely on a PEO during COVID-19

Besides struggling to remain afloat, the biggest challenge that businesses are facing during the Covid-19 pandemic is how to maintain employee safety and productivity. The HR challenges that the coronavirus has precipitated have never been witnessed before, which means that no one really knows which employee policies and support will bear the best results. That is why companies need to rely on a global PEO to navigate the coming months of uncertainty.

What is a PEO?

In simple terms, a professional employer organization (PEO) is an organization that takes care of human resource responsibilities and liabilities on behalf of an employer, so that the employer can focus fully on the core aspects of their business. Some of the responsibilities that PEOs cover include employee benefits, employment benefits and workers’ compensation. They are typically co-employers to the people who work for you (your employees).

With that in mind, why does your company need to rely on the services of a PEO during Covid-19?

1. They have the experience and infrastructure to handle the fast-changing demands of Covid-19

Reputable PEOs have all-in-one HR platforms, up-to-date tech tools, and the needed experience to navigate the murky employment waters that coronavirus has precipitated. They are like a seasoned HR manager who understands all employment metrics and who can help you interpret data accurately, no matter how fast it changes. Note that data is only as valuable as the minds that evaluate it and eventually act on it. If your business is about to be hit hard by the consumer behavior changes that coronavirus is precipitating, a good PEO will know early enough and initiate the right protocols to cushion your employees and your business. If there are any government interventions- e.g. tax reduction or subsidies- that your business could benefit from, the PEO will help you reap optimal benefits.

2. They can subsidize your workers’ compensation

Being co-employers means that in case your business is affected by a pandemic like the one we are experiencing at the moment, a PEO will chip in through their workers’ compensation insurance program. They will take care of part of your employees’ compensation and if you need to fire some workers as a result of the prevailing economic hardships, they will help you comply with all employment laws.

3. Help with employees’ contract termination

According to the federal Worker Adjustment and Retraining Notification (WARN) Act, in case of any planned layoffs, employers should give employees a 60 days’ advance notice. Violating this requirement can result in huge financial and legal implications; implications that can easily cripple your business. As larger layoffs and furloughs continue with the prolonged pandemic, you cannot rule out layoffs in your company. As a matter of fact, coronavirus-induced layoffs are coming so suddenly and dramatically that you are sometimes forced to terminate a large group of employees without getting time to follow the due process. You will save yourself all the trouble by contacting a PEO first to help you.

4. Covering part of healthcare costs

PEOs cover your employees with healthcare insurance so that you don’t have to incur huge costs in case one of your employees contracts Covid-19. A PEO can take care of up to $2,500 of any healthcare costs that could arise at your workplace. If your business employs 20 people, then that is more than $50,000 saved. Remember that the Affordable Care Act (ACA) stipulates that employers must provide health care plans for their workers. You need all the help you can get to keep your employees safe and healthy at a time when illness and death seems so real.

5. PEOs find new employees

If yours is an essential-services company, you are most probably looking to add new talent to your team. You need new blood to help with the increased workload of delivering products to people who are quarantined or self-isolated at home.  The process of posting jobs, sorting through resumes, interviewing applicants, and orienting successful applicants is long, tedious, and costly even without coronavirus looming around.  Now with the urgency that you need new employees and with everyone stuck at home, you can bet that the recruitment process can never be a bigger headache. Save yourself that headache by involving a PEO in the process. Let them do all the heavy lifting for you.


The HR challenges presented by COVID-19 are too massive to handle alone. If your company values its employees, it is best that you incorporate a PEO in your Covid-19 strategy. A PEO’s ability to drive and support strong business decisions is invaluable during these trying times.

Martha Payne is a Personal Growth Coach based in Shanghai, China. She has 10 years of experience working as a Business Development Professional and is passionate about nurturing talent and ideas that evoke transformative change in individuals, teams and organizations. She focuses on helping organizations develop leaders for the future by unleashing the full talent, passion and potential of individuals (particularly Millennials) through tailored leadership development and coaching programs.

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