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5 Industries that Benefit from HR Outsourcing

5 Industries that Benefit from HR Outsourcing

The best, most cost-effective HR outsourcing service is a Professional Employer Organization (PEO). And cost savings are only one of the many advantages of partnering with a PEO. 

Which of these advantages is most important to you depends on many factors, but a key factor is your industry. Employers in most industries can benefit from HR outsourcing, but here are five industries that particularly benefit from using PEOs: 

Industries That Benefit From PEOs 

Five major industries that benefit from PEOs are: 


Construction PEOs are particularly helpful when dealing with the realities of your industry. 

One of the inevitable facts of life in construction is cyclical labor needs. Many of your workers will be temporary, moving from project to project over time.

This means that you spend a lot of time processing unemployment claims for workers who may not be able to find another project right away. You also may have to deal with a higher unemployment insurance rate. By partnering with a PEO, you can turn over the entire process to them. They can process your unemployment claims and help you keep your SUTA rates down. 


According to the Bureau of Labor Statistics, the manufacturing sector saw 3.1 injuries or illnesses per 100 full-time equivalents in 2020. This is more than any industry other than transportation and agriculture.

This means that manufacturing companies absolutely must have great workers' compensation insurance. Of course, this comes at a high cost, which cannot be avoided; workers' compensation is legally mandated in almost all states.

Companies have to pay a high up-front deposit at the start of the year, and while they may get some of that money back if payroll dips, it can easily impact cash flow.

This is where PEOs come in. A PEO will pay the deposit for you, then allow you to pay as you go each month, avoiding the cash flow issues. Additionally, especially if you have a history of claims, you can adopt the PEOs experience modifier. This spreads risk through a much larger pool, lowering premiums. All of this allows you to spend less on workers' compensation. Additionally, PEOs can often give you access to safety training and ideas from their own experience, not to mention helping you design a return-to-work program to lower claim costs.

Information Technology 

Handling your client's personal and corporate information places you at high risk of a compliance burden. In the global world, most companies must comply with the General Data Protection Regulation (GDPR) in the EU, with the Sarbanes-Oxley Act, and with the California Privacy Rights Act, among many others.

This requires a compliance officer who can handle these things, but HR compliance often ends up being pushed to the side. IT compliance experts may not be as familiar with these regulations and may not have time to worry about them. They might, thus, be so worried about privacy that they miss something regarding the Fair Labor Standards Act or the Family and Medical Leave Act.

The PEO can handle these HR compliance issues for you so that your people only have to worry about IT compliance, saving time and headaches and reducing your risk of fines and employee lawsuits. 


In addition to having many of the same compliance concerns as IT, financial companies compete for the best minds and talent. There are worker shortages in all sectors, but finance is having particular difficulty right now.

Fortune 500 companies can offer competitive employee benefits and other perks because of their size and budget. Smaller companies often struggle to compete at this level. Not offering competitive benefits lowers the quality of workers you can attract and increases turnover when employees have life changes and have to leave to get better benefits.

When partnering with a PEO, you gain access to their master benefits plan. This plan provides economies of scale, allowing you to share risk and cost with the PEO's other clients. Often, this means you can afford Fortune 500 level benefits for small business prices. 

Professional Services 

Professional services companies often suffer under particularly high administrative burdens. Your HR team ends up spending most of their time on important, but tedious tasks such as payroll processing and benefits administration. It takes work and effort to turn a professional services company into an employer of choice, work your HR people can't do if they are burdened by work about work.

By taking on all of those tedious tasks, a PEO can free up your HR team to work on company culture and develop your business into an employer of choice. 

Combining the Benefits of PEO Partnerships 

Regardless of industry, you will benefit from all of these aspects of partnering with a PEO. Some might be more important to your industry than others. But a PEO gives all companies access to better employee benefits, improved HR compliance, unemployment claims processing, risk management, and administrative services such as payroll.

Partnering with a PEO is simply the best way to outsource HR and be competitive in your industry, whether you are building apartment complexes or helping people with their taxes.

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Small Business, HR Outsourcing