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NAPEO's most comprehensive look at the businesses that use PEO services.

Our new research finds that, relative to comparable non-clients, PEO clients are more likely to fare better on each of the key dimensions examined: they grow faster, they have lower rates of employee turnover, and the are more resilient.

PEO clients enjoy a better chance of survival, higher growth rates, lower employee turnover, higher employee satisfaction, and they fared better than other businesses in the challenging economy during the first year of the pandemic.

Almost two-thirds of all PEO clients have between 10 and 49 employees. Almost half of all PEO clients are in Professional Services, Manufacturing, or Construction. Small- and medium sized PEOs tend to have a smaller average client size than larger PEOs.

This white paper explores the effect that PEOs have had on business outcomes for their clients over the course of the pandemic to date, building on findings in the 2020 NAPEO white paper that undertook a short-term analysis of PEO impacts during the initial months of the pandemic.

As awareness of PEOs increases, the industry as a whole continues to grow. This paper provides new measures of the size, scope, and footprint of the PEO industry as of the end of calendar year 2020.

The 2020 COVID-19 pandemic has created unprecedented economic challenges for almost all employers, with small businesses hit especially hard. This white paper examines the available evidence on the early impact that PEOs had on business outcomes for their clients.

The areas where PEOs can deliver significant value to their clients can be divided into three broad categories: improving client's ability to attract, motivate, and retain employees; enabling clients to focus on their core businesses while PEOs handle all HR matters; and lowering HR-related expenditures.

PEOs produce benefits for their clients by providing them with a broad array of cost-effective HR offerings. As a result, PEO clients are able to provide their employees with a better value proposition, and employees respond in kind by helping their employers grow their businesses.

This report, highlighting the effects that partnering with professional employer organizations (PEOs) has on small and mid-sized businesses and their employees, is the fifth in NAPEO’s series of white papers designed to help the general public and the small and mid-sized business community better understand the economic impact and value of the PEO industry.