PEO Consultants Blog

Stats & Facts on Why Outsourcing HR to a PEO Benefits Your Bottom Line

Being in business is hard today. Competition is fierce, the regulatory environment can be stifling, and hiring (and retaining!) good employees is challenging. Most business owners are always on the lookout for advantages that will help them achieve their business goals.

About 75% of small business owners are confident in the reliability of outsourcing, specifically when it comes to legal and regulatory issues and employee relations. Establishing a co-employment relationship with a Professional Employer Organization (PEO) provides many advantages to small businesses, including time and cost savings.

Here are some of the main advantages businesses partnering with a PEO enjoy, according to the National Association of Professional Employer Organizations (NAPEO):

  • Annual revenue growth is double compared to similar companies that do not use a PEO
  • The likelihood of increasing profitability is 16% higher
  • 7-9% more growth than businesses not working with a PEO
  • 10-14% lower employee turnover than non-PEO clients
  • 4-5% higher employee engagement
  • Employees have employee benefits typically only offered by large corporations such as 401(k) plans; health, dental, life, and other insurances; and dependent care
  • Up to 40% reduction on annual health insurance premiums
  • Businesses using a PEO are 50% less likely to go out of business than companies that don’t use a PEO


These advantages, which were revealed for NAPEO by economists Laurie Bassi and Dan McMurrer of McBassi and Associates, also give business owners using a PEO more time to focus on business making them better able to take steps to position their businesses to be competitive and successful.

The PEO co-employment relationship gives businesses competitive advantages that result in higher profitability, stronger revenue growth and greater employee satisfaction. Why wouldn’t you use a PEO? For more details about working with a PEO, contact PEO Consultants.


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