PEO Trends: What They Mean for Your Business

PEO TrendsProfessional employer organizations are relatively new to the marketplace. Over the past twenty to thirty years, PEOs have developed from a few small startups to a flourishing industry catering to a broad range of businesses. Technological advances over those decades have also created new capabilities within the PEO framework, making it possible to streamline processes and provide more efficient services to clients. How have these advances benefited client companies?

Let’s look at 5 of the top trends in the PEO industry and what they mean for your business:

1. Cloud-Based Storage

Cloud-based storage offers an economical way to keep your business data secure and accessible without maintaining servers on-site. As PEOs make the switch from servers to the cloud, they can often provide better analytics, higher quality support, and increased data safety measures.

2. Automated Processes

Many tasks that used to require person-to-person interactions or manual entry can now be automated for greater efficiency. Most PEOs offer an online portal where employees can access information about their benefits, view handbooks and safety information, and get answers to common questions. In addition to improving productivity and reducing time spent on back-office tasks, automated processes can give employees more control over their benefits management and keep them informed about policies and procedures.

3. Better Benefits

Increasingly, PEOs can offer Fortune 500 level benefits to small businesses and their employees. These benefit packages include components the business might not be able to offer otherwise, including retirement plans, vision and dental plans, 529 plans, disability insurance, and flexible spending accounts.

4. Client Growth

In 2013, the National Association of Professional Employer Organizations (NAPEO) reported that PEO clients experienced 9% growth in employment rate as compared to 5% growth experienced by the overall economy. This differential reflects the client company’s ability to focus on business management while leaving tasks like compliance, workers’ compensation, and benefits management to the PEO. As PEOs continue to improve their services and make technological advancements, clients can expect this positive growth trend to continue.

5. Long-Term Business Relationships

Many PEOs retain clients from year to year at a rate of 80-90%. The impressive retention rate is due to the fact that companies working with a PEO can focus exclusively on growing the business and mastering core competencies. The PEO becomes proficient with the business model of each client, building strong mutually beneficial relationships and helping small businesses offer services and benefits to their employees that they couldn’t achieve otherwise.


If you’re ready to partner with a PEO, you have many options available to you. Our comparison tool can help you zero in on the features and services you want while helping you find a provider that can work within your budget. Whether you need help managing a large workforce across multiple states, or you operate a small local business with less than 50 employees, a PEO can help you boost productivity while managing the administrative tasks that eat up your office hours.