The Reason Your Peers are Using a PEO

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Written by Blake Odom

President & COO

Applied Business Solutions

September 5, 2018

Professional employer organizations, or PEOs, are becoming more common among businesses everywhere for a variety of reasons. These organizations provide benefits both for employees and for the businesses themselves, making them a popular choice for companies that want to increase profitability, raise employee morale and enjoy other advantages.

The Reason Your Peers Use a PEO

What Are Businesses Saying About PEOs?

According to a recent report released by the National Association of Professional Employer Organizations:

  • 98 percent of businesses using a PEO would recommend this service to a small business colleague.
  • 70 percent of businesses report that their revenues have increased since they began using a PEO.
  • 66 percent of businesses report that they have enjoyed more profitability since they began using a PEO.
  • On average, businesses that use a PEO experienced twice as much revenue growth as businesses without a PEO.
  • Expected revenue growth among businesses using PEOs was 40 percent higher than expected revenue growth for companies not aligned with PEOs.
  • Businesses using PEOs are 16 percent more likely to report an increase in profitability than those who are not using a PEO.

What Are the Benefits for Employees?

When compared to employees working in businesses without PEOs, employees in businesses using a PEO were more likely to report that their employer:

  • Has good HR practices and policies.
  • Has good hiring practices.
  • Provides employees with good development opportunities and training.
  • Designs employees’ jobs well.
  • Demonstrates a commitment to employees.

Employee satisfaction and confidence in the management of the company is also higher among employees of PEO clients. Specifically, employees working for companies using a PEO reported higher levels of engagement, were more likely to believe that the employer is taking the right steps to be competitive, were more likely to intend to remain with their current employer until retirement and were more likely to have confidence in the employer’s approach to grow the company.


Is a PEO Right for You?

If you’re a small business struggling to secure attractive benefits for your employees and potential hires within your budget, consider working with a Professional Employer Organization. A PEO can make your business look much larger than it is to an insurance company, allowing you to access better benefits at lower rates. Not sure if a PEO is right for your business model? Contact us at (855) 792-2808. We’re available to answer your questions and help you learn more about how a PEO can benefit your company.

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Applied Business Solutions has 75+ years of combined Payroll, Insurance and Human Resources experience with companies ranging from 1 to 2,500 employees.