Top 3 Advantages of a PEO Service
In today’s work environment businesses need every advantage they can get.
The PEO services employment model brings many advantages that attract and keep talent engaged with your company. The hiring environment has drastically changed in the past few years, and frankly, quality talent is hard to find. The good/bad news associated with the improving economy we now see ourselves experiencing.
There are new findings that point to the advantages of using a PEO service and three, in particular, stand out. According to the National Association of Professional Employer Organizations (NAPEO):
- Companies that use PEO services grow 7% to 9% faster
- Their turnover rate is 10% to 14% lower
- These companies are 50% less likely to close their doors due to failure
Let’s take a look at each of these three advantages in more details.
Companies that use PEO services grow 7% to 9% faster.
Successful companies grow by increasing revenue while controlling cost. The difference between these two determines the amount of money the company has to reinvest in growth and provides a return to its ownership.
Using a PEO can allow the business to focus on revenue producing activities (i.e., sales, new product development, etc.) by moving employment administration and governmental employment compliance to professionals rather than trying to build the experience in-house.
Also, creating an HR infrastructure cost money takes effort and is costly if the level of experience is not up to the standards needed. Just keeping up with changing federal and state employment laws is difficult at best and “google” is not a reliable way to get the accurate answers, so HR experience is critical.
Their turnover rate is 10% to 14% lower.
PEO services shine here. A PEO can bring quality affordable benefits to your business. Employees, both current and future will compare your benefits offering to other companies. In today’s social world, information flows freely, and employees are better situated to know whether you are providing quality benefits or something akin to a limited discount benefits plan.
A PEO uses its massive group buying power to bring benefits that rival much larger companies. This considerable buying power also provides multiple benefits plan selection, stable plan attributes, and much less volatile benefits cost. Nothing demoralizes employees more than having to pay more out-of-pocket or experience a cost increase every single year.
Also, the ancillary benefits are typically fantastic. PEOs bring benefits like dental, vision, disability, life insurance, even pet insurance, and 401k retirement accounts. The big PEOs make these benefits available to employees at no additional cost to the company.
These companies are 50% less likely to close their doors due to failure.
Companies that use PEO services provide a stable work environment for their employees. Employment management (aka HR) provides timely accurate information to your employees, substantial benefits and embody a culture that speaks volume of the care the company brings to their employees and their families.
Employees are productive reaching company growth goals more often and stay with your company longer. More long-term employees mean less training, less waste, and predictable stability. All of these traits are the fuel that a business needs to carve out a market position and grow.
The workforce data that a PEO service provides allows the company leadership to make informed labor decisions, control cost and manage the KPIs associated with successful long-term companies.
We’ve only covered three of the significant advantages that make the PEO model one of the most successful employment platforms available. With over 30 years of experience, PEO services are bound to continue to grow and become one of the largest employment platforms available.
Credit: Rich Becerra