NAPEO’s PEO Clients in the Pandemic Study

The COVID-19 pandemic has drastically changed the small business landscape over the past nearly two years. While some small businesses have been able to adapt to the landscape, others have struggled with closures, staffing issues, and more. So, where do companies utilizing PEOs land? The National Association of Professional Employer Organizations recently released a study that examines how PEO clients fared throughout the pandemic. 

NAPEO’s study looked at three different areas of PEO client’s happenings during the pandemic – business operations, changes in employment, and success in accessing major government programs. The findings from this study shows PEO clients are in a better position in each of the three categories, which sets these organizations up for long range success overall. Let’s take a deeper look.

Business Operations

As far as permanent closures go, 1.1% of PEO clients unfortunately shut down  for good while overall small businesses saw 2.6% closures during the pandemic. When looking at the overall impact of the COVID-19 pandemic on business, PEO clients are 32% less likely than their counterparts to have seen a negative impact on their business. These statistics show the overall positive influence PEOs can have on their clients business and how in a crisis situation, having a partnership with a PEO can help one’s organization weather the storm.

Changes in Employment

When it comes to retaining and finding employees during the pandemic, PEO clients once again performed better than other small companies. From January 2020 to June 2021, companies utilizing PEOs saw a 1% increase in employment while other small businesses saw a 6% decline. Interestingly, PEO clients do seem to have a more difficult time finding qualified employees – with 76% identifying with this issue compared to 29% of their counterparts. NAPEO believes this comes from the more rapid growth of PEO client companies, leading to more job openings and thus more difficulty in finding the right candidates for these open positions. 

Accessing Major Government Support Programs

PEOs played a critical role in assisting their clients in receiving government aid such as the Payroll Protection Program (PPP) – complicated application processes made receiving aid from these programs challenging for small businesses. According to the research, PEO clients were 18% more likely to have their 2020 PPP loans forgiven and 71% more likely to receive a 2021 PPP loan. These statistics show the benefit of having the experts from a PEO help your business receive all the government aid possible during challenging times. 

Overall, NAPEO’s study once again shows how beneficial a PEO can be to one’s organization. The expertise and services offered by a PEO can be the make-or-break decision for a company and in the long term can make the difference. Choosing a PEO can be a time consuming process – take a look at our PEO Buying Guide to help in your decision making process.