Believe it or not, the PEO industry is flourishing. With more PEOs in the United States than ever before (an estimated 780 to 980!), the market is extremely healthy and still growing
. But how well do you know professional employer organizations?
You may already be familiar with PEOs and the services they offer
, but many small and medium-sized businesses (SMBs) are still unaware that partnering with a PEO is a possibility. They also don’t know the benefits of working with a professional employer organization, or if they are even the right fit for a PEO.
A recent report
from the National Association of Professional Employer Organizations (NAPEO) took a closer look at the PEO industry. In addition to finding that the market is growing, they also looked at the value PEOs create for their clients and uncovered the following four statistics:
1) A PEO Can Help Small Businesses Grow 7% to 9% Faster
Business leaders from companies of all sizes want to grow their business. It requires a great deal of attention and thought-leadership to drive a company forward. By partnering with a PEO, CEOs and business leaders can outsource their HR needs so that the focus can be on high-value activities that build a company. When leaders don’t have to worry about HR work on a daily basis, and instead put full attention into the mission of the company, it increases the likelihood of business growth.
2) Companies Who Use a PEO Save 35% on HR Administration Costs
One of the bigger expenses companies have are their HR administration costs. Working with a PEO not only provides an organization with competitive benefits, but they can do it at a lower cost. A 35% savings can go a long way to building a more sustainable business. Think of all that can be done with that extra savings.
3) Partnering with a PEO Lowers Employee Turnover by 10% to 14%
One of the biggest fears SMBs have is employee turnover. The costs associated with employees leaving can be substantial, so retaining talent is usually a goal of every company. But this is increasingly difficult for SMBs, especially when employees look to move to larger Fortune 500-type organizations. Working with a PEO allows smaller businesses to offer their employees the same benefits as much larger companies. This helps lower turnover and improve employee happiness and engagement
4) Small and Midsize Companies Using A PEO Are 50% Less Likely to Go Out Of Business
Going out of business is a real risk for many SMBs. Even small internal or external changes can greatly impact an organization. But working with a PEO can help solve some of the challenges SMBs face. Faster growth, lower employee turnover and spending less on HR administration costs set small businesses up for greater success. It’s no wonder why SMBs who work with PEOs are 50% less likely to go out of business!
How Well Do You Know PEO?
Small business owners and leaders have many options for human resources. PEOs aren’t the right fit for every SMB, but having a better understanding of the industry and some of the benefits they can provide certainly doesn’t hurt. Who knows, maybe you’ll choose to work with a PEO down the road!