The National Association of Professional Employer Organizations (NAPEO) recently released new data showing the impact of PEOs on businesses in 2020. In previous studies, NAPEO showed us the positive influence PEOs had on their client businesses. This included a higher survival rate, lower employee turnover, and increased employee satisfaction. One new metric includes how companies serviced by a PEO fared during COVID-19 and – just like the other trends – businesses that utilized a PEO had a higher chance of survival during the pandemic. This new study shows the continual benefit a PEO can have on an organization and just how important having a team of experts available to help weather the storm with your business can be on your company’s ability to survive and grow.
FullStack specifically experienced this growth in 2020 because of two important themes that were documented in hundreds of sales conversations, according to Daniel Fuller:
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Company executives transitioning their companies to work from home no longer had the capacity and time to manage HR themselves. In many cases, these executives were also managing their children’s education and juggling home responsibilities during the pandemic.
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Hire the best talent anywhere – Companies who were previously tied to a geographical location began hiring nationwide, finding the best talent. With adding new states where employees reside, a company’s HR and payroll compliance to-do list becomes longer and more complicated.
As a whole, the PEO industry’s growth shows just how impactful these types of organizations can be and their growing importance for small and mid-sized companies. PEOs help 173,000 companies throughout the United States – overseeing the payroll, human resources, and benefits of 4 million worksite employees with annual wages of $216 billion. For perspective, the number of worksite employees overseen by PEOs equals that to the four largest employers in the United States (Walmart, Amazon, Kroger, and Home Depot). As an industry, we’ve seen almost an 8% annual growth since 2009. PEOs also increasingly capture a larger percentage of small to mid-sized businesses as clients, with 2020 showing over 15% of these companies within the US utilizing a PEO for their human resources solutions.
This new survey from NAPEO shows how important PEOs have become to small to mid-sized companies. The services offered can allow companies the peace of mind needed while allowing managers and leaders the ability to focus on growth opportunities and manageable scaling. Want to learn more about how FullStack can help your company with its HR, payroll, benefits, and more? Schedule a call with a team member today.