As a business owner, you know the value of data to support whatever decisions you make for your company and your employees. So if working with a professional employer organization (PEO) is something you’ve been considering, having all the facts – and the numbers – to support that move can be very helpful.
A comprehensive survey by the National Association of Professional Employer Organizations (NAPEO) of small and mid-sized business owners and their staffs was designed to compare the differences between PEO client companies and their non-PEO counterparts. The results show that PEOs have a significant positive impact on their clients in a variety of ways.
How Business Owners Feel About PEOs
In the NAPEO survey, nearly all (98 percent) of business owners who are current PEO clients said they would recommend a PEO to their small-business colleagues. They further noted that:
- Their revenues had increased since they became a PEO client (according to 70 percent of respondents).
- Their profitability had increased since they became a PEO client (according to 66 percent of respondents).
The survey also included multiple questions about revenue change and profitability.
- Over a one-year period, PEO client firms’ median revenue growth was twice that of non-PEO firms (10 percent versus 5 percent), and
- PEO client firms were 16 percent more likely to report an increase in profitability.
The Employee Perspective
Four survey questions asked employees to evaluate their company’s steps toward being competitive, providing excellent customer service, growing, and being innovative. On average, scores were 7 percentage points higher on these questions from PEO client employees.
- These findings are consistent with the expectation that business owners who are PEO clients don’t have to spend as much time dealing with HR administrative tasks, and therefore can focus more on their core initiatives.
Employees were also asked about the quality of HR practices at their companies. On average, PEO client responses were 7 percentage points higher than those from non-PEO businesses.
Compared to employees working for non-PEO companies, those working for PEO clients were more likely to report that their employer:
- Demonstrated a commitment to them as employees (average response was +8 percentage points),
- Had good hiring practices (+8 points),
- Had good HR policies and practices (+5 points),
- Did a good job of designing jobs (+4 points), and
- Provided employees with good training and development opportunities (+4 points).
When it came to employee satisfaction and confidence in company management, scores for PEO client employees were also higher in terms of:
- Engagement (+5 points),
- Intention to stay with their current employer until retirement (+8 points),
- Belief that their employer was taking the right steps to be competitive (+8 points),
- Trust that their employer was supporting them in delivering excellent customer service (+7 points), and
- Confidence in their employer’s approach to growing their company (+5 points).
Want More Information About a PEO Partnership?
To learn more about PEOs and how a PEO partnership might improve your business, contact Lyons HR today. We’re an Employer Services Assurance Corporation (ESAC) accredited and IRS certified PEO based in Florence, AL, with 10 operations centers serving hundreds of clients across the U.S. Give us a shout so we can talk more about what we can do for your company.