The ROI of PEO

What can you truly gain by working with a Professional Employer Organization?

An independent analytics and research firm, McBassi & Company, recently conducted a study for The National Association of Professional Employer Organizations (NAPEO). – The intent was to determine areas of significant value provided by clients through PEO services.

The categories identified were:

  • Improving ability to attract, motivate, and retain employees
  • Freeing employers to focus on core business
  • Lowering HR-related expenditures

The Results are as Follows:

Attracting, Motivating and Retaining Employees

PEOs offer an economy of scale – their buying power means they are able to offer a more broad scope and a higher quality of benefits than an individual business typically can. This allows even small companies to offer premium life insurance, retirement plans, and health benefits to employees,  remaining competitive with much larger corporations.

Increasing Focus on Core Business

With a PEO partner assuming responsibility for all HR functions, businesses are free to focus on growth and innovation, ensuring the health and longevity of the organization and attracting high-quality candidates.

Reducing HR-related expenditures

The results of this study indicate that employers who partner with a PEO can expect to realize an estimated ROI of 27.2 percent per year. This figure is based on calculating cost savings in five HR-related areas and represents an annual average cost savings of $1,775 per fulltime employee:

  • HR personnel costs
  • Health benefits
  • Workers’ compensation
  • Unemployment insurance (UI)
  • Other external expenditures in areas related directly to HR services (payroll services, benefits, etc.)

“We have always known that PEOs help companies grow faster and more profitably,” said Bill Lyons, Founder and CEO of Lyons HR, “but it is great to have that claim actually supported by empirical data. The most recent white paper conducted by McBassi & Company shows that businesses who partner with a PEO achieve an annual return on investment (ROI) of 27.2%. This ROI includes only the actual cost savings incurred by the company and does not include the strategic value the PEOs bring to their clients.”

About Lyons HR

Lyons HR is a professional employer organization (PEO) founded in 1995 in Florence, Alabama. The company works with thousands of employees and hundreds of employers across the United States. Their comprehensive HR management solutions help small and medium-sized businesses, to operate more efficiently. Services include payroll and tax administration, employee benefits, HR consulting, regulatory compliance, risk management, and recruiting.

Lyons HR is accredited by the Employer Services Assurance Corporation (ESAC), a distinction earned by only about 5 percent of all PEOs and is certified by the Internal Revenue Service. Additional information about Lyons HR PEO services may be found at www.lyonshr.com.

To learn more about how Lyons HR can help your business save time, lower cost and improve focus, contact us today.