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ROI of Using a PEO

The ROI on a PEO is 27.2% according to a new 2019 study released today by the National Association of Professional Employer Organizations (NAPEO) .

The new report focused solely on costs and calculated savings for PEO clients in five HR-related areas:

  • HR personnel costs
  • Health benefits
  • Workers’ compensation
  • Unemployment insurance (UI)
  • Other external expenditures in areas related directly to HR services (payroll, benefits, etc.)

An annual per employee savings of $1,775 is reached according to the study. Notable findings are lower employee turnover, higher rates of both employee and revenue growth, and enhanced  employee benefit offerings.

PEOs provide HR, payroll, benefits, workers’ comp, and regulatory compliance assistance to small and mid-sized companies. By providing these services, PEOs help businesses improve productivity, increase profitability, and focus on their core mission. Through PEOs, the employees of small businesses gain access to employee benefits such as 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits typically provided by large companies. A copy of the full study is available here.

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