Emerging EB Business Insights
PEOs: A Partner for Small Business Success
FEBRUARY 4, 2025
Limited resources make it difficult for smaller businesses to offer competitive benefits and meet the strategic goals that drive profitability. Businesses that want to expand their HR capacity and employee benefits without breaking the budget should consider the value of a professional employer organization (PEO).
Why Partner With a PEO?
Companies in a PEO arrangement:
|
Grow 7% to |
|
Have 10% to 14% |
|
Are 50% less likely |
Source: NAPEO
How Do PEOs Support Small Businesses?
PEOs are outsourced firms that can provide smaller companies access to the same benefits and amenities available to much larger organizations, including:
Full-service HR support. Depending on the arrangement, PEOs generally take on the responsibility of routine and often redundant administrative tasks, giving business owners time to focus on core competencies and grow the bottom line. Partnering with a PEO can save business owners an average of 27% on HR-related costs, or up to $1,775 per employee per year.1
Expertise on demand. Many PEO organizations have HR, employment law and accounting professionals on staff, providing valuable expertise and reducing exposure to liability without the overhead expense of hiring and maintaining additional departments.
Benefits administration. In addition to managing benefits programs and associated administrative tasks, PEOs can give businesses access to more robust and affordable benefit plans such as 401(k), health, dental, life, disability and other insurance. PEOs can also negotiate better group rates, helping businesses offer more competitive benefits at a lower cost.
Risk management. PEOs help businesses manage employment-related risks such as workers’ compensation insurance, employment practices liability insurance (EPLI) and workplace safety programs.
How USI Can Help
To help you evaluate and choose a service provider, we leverage our extensive knowledge of the PEO marketplace:
- Needs assessment. We help you identify your company’s specific benefits, HR, compliance, insurance and technology needs.
- Vendor recommendations. We conduct an independent analysis of the PEO marketplace and provide custom recommendations on top vendor providers.
- Benchmarking and negotiation. We benchmark and negotiate appropriate rates and terms to ensure you have access to the best price.
- Ongoing support. We provide expert implementation support to ensure a smooth handoff, as well as ongoing service and support with renewals.
Seamlessly Transition Between PEO Providers
Many employers stay with their current PEO out of concern of the cost and time to switch to a different provider. As a result, plans and services may no longer meet employers’ needs.
USI Insurance Services can help clients that have outgrown their current provider evaluate alternative PEO options better suited to their needs. Our PEO specialists actively assist in the transfer to ensure a smooth transition between PEOs.
Smaller businesses looking for a competitive edge should consider the benefits of outsourcing to a PEO. Contact your local USI benefits consultant or email ebsolutions@usi.com to learn more.
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