As a small to mid-sized business owner, you know the importance of effective HR management.
You also know its cost – not just in budget dollars, but also in terms of the staggering amounts of time and energy that talent management tasks consume. Wouldn’t it be great to remove this burden from your plate, so you could focus more on running your business, while not letting any of those critical HR responsibilities fall by the wayside?
Maybe it’s time to join the growing percentage of employers who are partnering with professional employer organizations (PEOs) to make this happen. Based on statistics from the National Association of Professional Organizations (NAPEO), here are four reasons why this is such a smart business decision:
1. You can grow your business faster.
Businesses who use PEOs grow seven to nine percent faster than their non-PEO counterparts. This is true because business growth is much more achievable when you can focus all your time and attention on it. This includes key strategic and business-critical HR matters. You don’t lose control of your business or your employees; you just delegate some or all of the time-consuming related work to your PEO.
2. You can lower turnover.
Recruiting top talent is tough, bur retaining your superstars can be even tougher – especially with the competition nipping at your heels. A PEO partnership gives you and your employees access to Fortune 500 level benefits that would not otherwise be an option for your company. This is accomplished through a co-employment agreement whereby your PEO becomes the employer of record. Then, your PEO pools your employees with those from its other client companies to achieve benefit purchasing and negotiating power via economy of scale.
- PEOs lower their clients’ employee turnover by 10 to 14 percent.
- Not only can you offer competitive health insurance options, but a wide scope of other attractive benefits as well. These include retirement and 401(k) plans, dental and vision coverage, HSAs and FSAs, voluntary benefit options, and more.
3. You can save on administrative costs.
NAPEO research has shown that PEO clients can achieve savings of up to 35 percent on HR administration. Highly-qualified PEO staff members can handle anything from the initial review of resumes and scheduling interviews to setting up and facilitating training programs and open enrollment, as well as various aspects of ongoing employee liaison and communications.
4. You’ll be more likely to stay afloat.
Talk about the ultimate bottom line! But the reality is: staying open and viable has been a growing concern for small businesses for a while. Today, if you’ve emerged unscathed or at least not badly bruised by Covid-19, you can appreciate this even more. Companies using PEOs are 50 percent less likely to go out of business – thanks in large part to those first three factors: enhanced growth, higher talent retention, and administrative cost savings.
Looking For More Information?
Lyons HR is a PEO accredited by the Employer Services Assurance Corporation (ESAC) and certified by the Internal Revenue Service (IRS) – two gold standards that assure our clients the highest levels of service and financial integrity. We’d be happy to tell you more about the advantages of a PEO partnership, so reach out to us today to learn more. You also might want to check out We are HR, a comprehensive guide to PEOs written by our founder, Bill Lyons.