Companies and services like PEO and ASO have become more and more popular recently, as small businesses and companies work to stay competitive and compete with larger businesses. So what are ASO and PEO, and what are the differences, which would work better for you? ASO companies or administrative services organization offer aso administrative services only, they handle services like payroll services, benefits administration among other things. A PEO or Professional Employment Organization will also handle similar services, but also hire all of the employees of the client company in order to offer better employment benefits. Here are a couple of the differences, so you can decide which works best for you and your company.

Who’s in Charge

One of the big differences is who is in charge. A PEO is like outsourcing, so they are in charge of how they do things, and have more leeway. Aso administrative services only handle specific services that you want them to, and contract with you to do them. They don’t employ your employees, but only handle specific areas that you either can’t or don’t want to. ASO companies are like an extension of your own employee base, rather than a separate company in charge. In addition, PEO companies can dictate many policies and strategies. ASO companies work more like consultants, giving advice, but in the end the company can decide what policies they want to follow or not.


A PEO is a much more permanent choice for a company. IF they contract or join one it would be much harder to cut ties and leave because it doesn’t work than it would be with aso companies. Most notably the individual employees of the company would have to file multiple tax forms, and enroll in new benefit plans. This can be an annoyance and disrupt productivity for a long time as the company tries to get back into a normal work routine. An ASO wouldn’t have that issue if the client company wants to stop working with them for whatever reason.


ASO’s typically handle a lot less services and programs than PEOs, which has already been mentioned a little bit. One of the big side effects of this is that an ASO is going to be a lot cheaper to hire and pay, as opposed to a full PEO. Not all companies are going to be that exact same, but generally an ASO is going to cost much less, no matter what exactly they are doing.

Which One Works?

Both work well for their specific purposes, which are different. You can’t really say that one company works better than the other, or that one is always better than the other. IT depends on your situation and what you are looking for. What services do you need, how much money do you have available to spend? All of this is important to deciding whether you want to go with a PEO or whether it would be better to use an ASO. Hopefully knowing a little bit more about the differences can help you decide which suits your situation better.

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