Professional employer organizations (PEOs) are relatively new on the global business scene, having developed into a flourishing industry within just the past 20 to 30 years. But their rapid growth is not surprising with statistics such as these:
- Employee turnover rates for companies that partner with PEOs are significantly lower than they are for comparable companies overall. Companies that use PEOs have annual turnovers of 28 to 32 percent, versus approximately 42 percent for all employers. As an HR leader, you’re well aware of the impact retention – or lack of it – can have on your business and its long-term success.
- Small businesses that partner with PEOs are 50 percent less likely to close than their non-PEO competitors. Their success is attributed to the fact they outperform other companies in such critical areas as employment growth and retention.
Ongoing technical advances that make it easier to streamline business processes and provide more efficient client services also have contributed to the growing utilization of PEOs.
Thinking About Partnering With a PEO?
If you’ve been weighing the pros and cons of a PEO partnership for your company, these trends may steer you down that path beginning in 2019:
- Cloud-based storage capability. A PEO can help you transition from on-site servers to the cloud as a more economical way to keep your business data secure and accessible. Additional benefits include better analytics and higher-quality support.
- More automation, which increases efficiency. Most PEOs offer portals where your employees can access benefit information, safety information, handbooks and other valuable tools. This means less time spent on back-office tasks. It also gives employees more control over their benefits management and keeps them up to date on your policies and procedures.
- The ability to offer better employee benefits. A PEO enables you to offer more competitive benefits, such as retirement plans, vision and dental coverage, disability insurance and flexible spending accounts, regardless of the size of your business.
- Employment rate growth. Over a recent one-year period, PEO client companies experienced nine percent growth in employment rates, as compared to a five percent growth in the overall economy. Why? Because PEO clients were able to focus more exclusively on managing their business, leaving such HR administrative tasks as compliance, workers’ compensation and benefits management to their PEOs.
Partner with Lyons HR!
As an Employer Services Assurance Corporation (ESAC) accredited PEO, Lyons has achieved the industry gold standard for best practices and financial responsibility. If you think a PEO may be right for you, we’d be honored to be your business partner. Read our related posts or contact us today to learn more.