How can a PEO Help Your Business?
PEOs offer the peace of mind that comes with the expertise of a full-service HR department. Payroll, benefits, HR, tax administration, and regulatory compliance are some of the many services PEOs provide to growing businesses across the country. Companies that work with a PEO can:
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Streamline HR Operations
Simplify payroll, benefits and compliance
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Focus on Core Business
Free up time and resources to grow your business
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Enhance Retention
Offer competitive benefits and opportunities
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Mitigate Risks
Ensure compliance with legal regulations
Hear Why a PEO Matters
“For any company considering using a PEO, it’s a smart decision – especially for small companies. Our PEO gives us a wide variety of services that enable us to focus on our core competencies rather than tedious paperwork.”
— Sharon, Business Owner
Frequently Asked Questions
According to a recent study by noted economists Laurie Bassi and Dan McMurrer, small businesses that use PEOs grow 7 to 9 percent faster, have 10 to 14 percent lower employee turnover, and are 50 percent less likely to go out of business.
By providing payroll, benefits, and HR services and assisting with compliance issues under state and federal law, PEOs allow small businesses to improve productivity and profitability, to focus on their core mission, and to grow.
Through a PEO, the employees of small businesses gain access to big-business employee benefits such as: 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits they might not typically receive as employees of a small company.
The PEO client/business owner retains ownership of the company and control over its operations. As co-employers, the PEO and client will contractually share or allocate employer responsibilities and liabilities per a client service agreement (CSA). The PEO will generally only assume responsibilities associated with a “general” employer for purposes of administration of benefits and remittance of payroll and payroll taxes. The client will continue to have responsibility for worksite safety and compliance. The PEO will be responsible for remittance of payroll and employment taxes, may maintain employee records and may retain a limited or general right to hire and fire, as delineated in the CSA. Because the PEO also may be responsible for providing access to workers’ compensation coverage, many PEOs also focus on and provide assistance with safety and compliance. In general terms, the PEO will focus on employment-related issues, and the client will be responsible for the actual business operations.
The PEO Industry at a Glance
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17%Employers
with 10-99 employees use PEOs
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200,000+Businesses
utilize PEO services
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$414+Billion
estimated industry revenue
Resources and Data
PEO Clients: Faster Growing, More Resilient Businesses
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.
The PEO Industry Footprint: 2023
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.
PEO Clients: An Analysis
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.
PEO Clients in the COVID-19 Pandemic: A Follow-Up Analysis
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.
The PEO Industry Footprint
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.
How PEO Clients Fared in the First Months of the COVID-19 Pandemic: A Comparative Analysis
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 ROI of Using a PEO
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.
An Economic Analysis: The PEO Industry Footprint in 2018
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.
PEOs: Good for Business and Their Employees
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.
The State of the PEO Industry 2016: Markets, Value, and Trends
Healthcare, taxes, and regulation – exactly the issues that PEOs help clients address – are consistently reported as the top concerns of small businesses.
An Economic Analysis: The PEO Industry Footprint
Anecdotally, evidence points to a growing PEO industry driven by a rebounding small business sector, an increase in the use of outsourcing by small businesses, and the rise of complicated employment regulations such as the Affordable Care Act (ACA).
Professional Employer Organizations: Keeping Turnover Low and Survival High
This study examines employee turnover and business survival rates for businesses using PEOs and compares them to national data available from the U.S. Bureau of Labor Statistics (BLS).
Professional Employer Organizations: Fueling Small Business Growth
This study explores the evidence to determine how PEO clients are faring relative to other companies in the economy.