Business growth doesn't just happen - it takes the right partners. Professional employer organizations (PEOs) could be the secret sauce small and mid-sized businesses never knew they needed. By providing a broader array of human resources services and benefits, PEOs give companies capabilities beyond their size and fuel accelerated expansion.
As we'll explore in this blog, a whitepaper from the National Association of Professional Employer Organizations (NAPEO) outlines how PEO services provide small and mid-sized businesses the capabilities to punch above their weight class.
For example, the whitepaper shows that retirement plans have much higher availability and participation rates among PEO clients compared to other small businesses - 40% versus 13% for companies with under ten employees. This expanded access to retirement plans helps PEO clients attract and retain talent.
Additionally, the whitepaper estimates that PEO clients achieve at least a 21% cost savings on HR administration compared to non-PEO small businesses. This operational efficiency frees up significant funds to reinvest in strategic growth.
Most tellingly, the NAPEO analysis found employment growth was 7% higher for PEO clients compared to small businesses overall since 2007. This suggests PEOs provide tangible resources to accelerate business expansion.
With figures like these, it's clear PEOs empower small and mid-sized companies to add capabilities beyond their size and rapidly scale up their success.
Let's start by examining how PEOs expand strategic growth services to fuel business development.
1. PEOs provide strategic growth services
By providing a broader array of human resources services and benefits, PEOs empower small and mid-sized businesses to offer capabilities typically only seen in larger enterprises. For example, nearly all PEOs provide retirement planning services, with higher availability and participation rates than other small businesses.
PEOs also commonly offer health insurance, training programs, HR compliance assistance, and other services that would be difficult for a small company to deliver alone.
This expansive talent management and HR support suite helps PEO clients attract and retain top talent - a critical ingredient for growth.
Essentially, PEOs level the playing field by bringing enterprise-grade HR services and benefits to small and mid-sized organizations. This equips companies with strategic capabilities to manage talent, fuel growth, and compete in today's business landscape.
2. PEOs rapidly scale up capabilities
PEOs provide immense relief from day-to-day burdens for small business owners and executives. This enables leadership to redirect their time and focus toward core business activities like operations, innovation, and strategic planning.
Rather than getting bogged down in paperwork, PEO clients can devote energy to moving their company forward. The whitepaper cited earlier estimates that PEOs deliver these services at a 21% lower cost than small businesses can achieve alone, freeing up the budget to reinvest in growth.
3. PEOs mitigate growth risks
Complex areas like workers' compensation and constantly evolving HR regulations represent significant liabilities for small and mid-sized businesses. PEOs mitigate these risks through economies of scale and dedicated legal and compliance teams.
With PEOs as partners, clients reduce liability exposure and avoid the need to self-fund specialized expertise.
This risk and compliance assistance keeps small businesses on legally solid ground as they scale. Owners don't waste time anxiously tracking regulations or risk missteps born of ignorance. Instead, PEO expertise provides assurance while clients stay focused on strategic priorities.
By leveraging PEO competencies in risk and compliance management, small and mid-sized companies can confidently pursue growth trajectories that would otherwise expose them to substantial liability threats.
4. PEOs increase competitive differentiation
Partnering with a PEO gives small businesses access to enterprise-grade benefits and capabilities typically only feasible for much larger corporations. This includes broad health insurance options, retirement plans, and specialized HR expertise.
PEOs achieve economies of scale that level the playing field by pooling employees from multiple small clients. Suddenly, small businesses can compete for talent with industry giants by offering robust compensation and benefits packages.
Along with talent management advantages, PEOs elevate compliance capacities, risk mitigation, profitability margins, and more. This expands small businesses' ability to compete successfully and seize growth opportunities.
With PEOs as partners that bring enterprise-level benefits, compliance, and strategy support, small and mid-sized businesses are empowered to set their sights on bold expansion goals.
The PEO Difference is real
By expanding talent management services, driving operational efficiency, managing risk, and enhancing competitive differentiation, PEOs equip companies to achieve rapid expansion.
The proof lies in faster hiring rates, increased revenues, and the many examples in the whitepaper of clients who credit their PEOs with supercharging growth. While the path forward looks different for every company, PEO services pave the way for small and mid-sized businesses to scale up successfully.
For any ambitious entrepreneurs, executives, or owners seeking to boost their organization's trajectory, partnering with a PEO could provide that vital fuel for growth. The comprehensive HR support and operational expertise let leadership remain focused on competitive differentiation and strategy.
Ultimately, PEOs rapidly expand small businesses' capacities for sustainable, aggressive expansion. For companies with bold dreams of scaling up, PEOs just might be the secret ingredient they need to accelerate success.
