Small businesses that are eager to grow have a few options for expanding their influence. While they definitely need to be equipped with a savvy crew of employees and a great product, there is another feature that could help them reach new heights: PEO companies. Although some organizations may be hesitant about handing over the reigns of their HR and payroll responsibilities, it is a move that positively impacts growth and revenue.
PEO services make a real difference
The National Association of Professional Employer Organizations released a study detailing the relationship between PEOs and small businesses. According to the research, those businesses that partner with a PEO have employment growth nearly 10 percent higher than their counterparts that do not use such a resource.
HR outsourcing can also save small businesses costs, improving the bottom line. NAPEO's report found small business clients typically save at least 21 percent on their HR administration.
"This new study clearly shows that PEOs are a great value proposition because they help small business owners manage the 'people side of their businesses more effectively, by ensuring that they avoid compliance pitfalls, and are able to provide key benefits for their employees," said Pat Cleary, the president and CEO of NAPEO. "At the same time, PEOs free up time for executives to grow their businesses by focusing on operations, strategy, and innovation."
Why do PEOs matter?
Some may be wondering why PEOs can play such a significant role in growing a small business. The answer isn't simple - in fact, there are so many ways in which these companies play a part in the health of a small business that it is hard to zero in on just one area.
For example, PEOs help small businesses remain in compliance with the law. This can be difficult for even the largest of companies with unlimited resources at their disposal, and when organizations are faced with tight budgets and a small workforce, it can become overwhelming to try to handle it alone. PEOs make it easy to handle any type of legal affair, in addition to offering the HR services employees have come to expect.
The report also noted that benefits managed by outsourcing companies typically have higher participation rates. That means employees are taking advantage of solutions, increasing their engagement and job happiness, which in turn can positively affect retention, recruitment and growth.