NEW ECONOMIC DATA SHOWS PEO ENGAGEMENT DOUBLES GROWTH RATE FOR BUSINESSES

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National Association of Professional Employer Organizations (NAPEO)

Sep 18, 2024, 11:29 ET

PEO Clients Also Stay in Business Longer and Experience Lower Turnover

ALEXANDRIA, Va., Sept. 18, 2024 /PRNewswire/ -- Small and mid-size businesses that use a PEO have a growth rate that is more than twice as high, have lower employee turnover and are 50 percent less likely to go out of business than comparably sized businesses, according to a new study released today by the National Association of Professional Employer Organizations (NAPEO). PEOs provide payroll, benefits and other HR services to more than 200,000 small and mid-size businesses employing 4.5 million people.

The NAPEO-commissioned research by McBassi & Company compared business operations, changes in employment and business resilience of PEO clients and non-clients from January 2023 to January 2024. It showed that businesses that use a PEO:

Have a growth rate more than two times higher.
Have an employee turnover rate that is 12 percent lower.
Are 50 percent less likely to go out of business.
Show a greater overall ability to survive and thrive during difficult economic circumstances.

"This study confirms that American businesses partnering with a PEO are better positioned for long-term success," said NAPEO President and CEO Casey Clark. "With backend administrative tasks covered by their PEO, business owners can focus on their core mission and their employees are incentivized to stay and reap the many benefits that PEOs provide."

The white paper is the 13th in a series. Previous studies conducted by McBassi & Company have shown that PEOs help small businesses provide better employee benefits at an affordable cost, and have higher revenue growth, increased profitability and higher employee satisfaction.

About NAPEO
The National Association of Professional Employer Organizations (NAPEO) is The Voice of the PEO Industry™. NAPEO's 219 PEO members provide payroll, benefits, workers' comp, regulatory compliance assistance and other HR services to hundreds of thousands of small and mid-size businesses nationwide. Our members account for more than 90 percent of the industry's $358 billion in revenue. An additional 216 companies that provide services to PEOs are associate members of NAPEO. For more information, please visit www.napeo.org.

SOURCE National Association of Professional Employer Organizations (NAPEO)