7 Advantages of using a PEO Service for Small Businesses

Business benefits

If you are a small business owner, you are a part of attracting more private-sector jobs than even large companies. According to NAPEO, there are more than 1.1 million businesses in the US having 10 to 99 employees. If you are one of these small businesses, you may be feeling the pressure of hiring more people and keeping up with human resources. It can be difficult to even keep up with the basics of HR which may have you looking for the best PEO companies for small business to help you with your challenges. Let’s go on to look at 7 advantages of using a PEO service for small businesses.

#1 – Businesses Grow Faster

Small businesses that use PEO’s grow faster than those that do not. This is most likely due to the fact that everyone in a position of power is able to focus on what they need to do instead of trying to untangle the mess that becomes human resources when inexperienced people are handling it.

If a leader is not operating where they should be, it is likely that the organization will stumble in their absence. Getting back where you need to be in your small business will enable you to grow faster than if you continued focusing on other administrative tasks like HR.

#2 – Lower Employee Turnover

Employees love to be heard and given the attention that they deserve. When you have a PEO company to take care of their needs and help them whenever a challenge arises, it is less likely they will go somewhere else to seek employment. The better the work environment, the less turnover there will be in your company.

It is inevitable that you will experience turnover, but lowering it by even a little bit will help your business.

#3 – Less Likely to Go Out of Business

If you are working with a PEO company that can help you through complicated processes with payroll, HR and other parts of your business, your business is less likely to fail. Having help from people that specialize in the structure of human resources allows you to focus on keeping your business afloat and continuing its growth to success.

#4 – Access to Better Benefits

When you are a small business, you aren’t able to get access to benefits that Fortune 500 companies have the access to. When you work with a PEO service, you will be able to get those same benefits and options. This can be a drawing card for more talent and set you apart in the job market.

#5 – Increased Access to 401(k)

It is rare that you will be able to offer retirement plans if you are a small business, but when you work with a PEO, it will open up new worlds to you.

#6 – More Services Without Paying More

If you are a small business that is trying to get access to more services, you may experience a wall of challenges and even a higher price tag. When you are working with a PEO, you get access to more services without having to pay that major price tag.

#7 – Understanding Regulations Both State & Federal

It can be difficult to keep up with all of the latest regulations that are coming down, but when you work with a PEO, they help you understand the terms and how they are going to work with your business. If you need to make changes so comply with the regulations, they will help you set up processes and systems to make sure that you are doing the right thing. Some of these regulations can be rather challenging to comply with, but if you have the help of professionals, they can make sure that you have every i dotted and every t crossed.

Choosing the Right PEO for You

If you have decided that you want to move forward on working with a PEO, that means that it is time for you to decide which one is the one for you. You shouldn’t try to pick “the best” since depending on what you need and what they offer, the match could be different from one company to the next.

Ideally, you want to find a company that has worked in your industry with a company that is your size or around your size because you will then know that they understand what your needs are.

Ask for professional references so you can see what their clients think about their work. Don’t simply read words on a page and good reviews. You need to speak with these people and make sure that you feel their conviction about their endorsement. This is an important move for your business so you need to ensure that you are making the right decision about who to work with.

Seeing what affiliations and accreditations the companies you are considering have is also another good idea since this another sign that they are trustworthy.


Now that you understand the benefits of PEO, you can start going through your process of aligning yourself with the right company for you. This is mean to be a long term relationship so there is no need to rush into it. The benefits are numerous when you pick the right match but the challenges are just as numerous if you don’t pick the a good company to work with so take the time to do due diligence.

About Carson Derrow

My name is Carson Derrow I'm an entrepreneur, professional blogger, and marketer from Arkansas. I've been writing for startups and small businesses since 2012. I share the latest business news, tools, resources, and marketing tips to help startups and small businesses to grow their business.

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