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10 Reasons Companies Partner with a PEO

Outsourcing HR is the only way to get the employer out of the employer's business. That enables them to get back to business instead of idling on staffing issues; it also means they can eliminate liabilities in terms of payroll taxes etc. as the Professional Employer Organization (PEO) partner becomes the employer of record. Here are 10 reasons why outsourcing HR is a great idea.

1.  Fundamentally, outsourcing allows the employer to focus fully on their core business, a driver for 42% of companies to outsource. (How good do you want to be at doing things that don’t make you money?)

2.  According to SCORE and the Small Business Administration, HR work consumes 25-35% of a small business owner’s time. That’s time that can be freed to focus on business growth.

3.  For example, one of our clients reported he reduced the cost of sales by 2% to 3% just by freeing time spent on vendor invoices. In addition, there are “hidden” benefits – not only does the business owner no longer have to spend time on these tasks, an outsource partner like a PEO will do a better job in less time at HR-related tasks because it’s their core expertise.

4.  When you gain access to world-class HR expertise and talent, you reap many rewards. For example, world-class HR organizations spend 26% less and require 32% fewer staff when compared to typical HR groups.

5.  Organizations with world-class HR operations also spend 29% less on outsourcing than others.

6.  For example, administrative costs are about $450 lower per employee for businesses that work with a PEO.

7.  And employers can consolidate virtually all labor-related expenses into a single line-item. Not only is it possible to streamline HR functions, accounting can be simplified as well.

8.  Plus, there are manifold business benefits. Those that work with a PEO grow up to 9% faster and are 50% less likely to go out of business.

9.  It also helps with employees. PEOs can offer access to health coverage, retirement plans, and other benefits that might not otherwise be available to small-to-midsize organizations. Better benefit offerings can help to attract and retain a higher tier of employees.

10. It allows organizations to keep up with their peers: PEOs provide services to between 2.7 and 3.4 million workers in the U.S. If your competitors have been able to reduce their staff expenses, gained access to extensive vendor talent and expertise, and are focusing more squarely on growth – why aren’t you?


CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about our ability to create a strategic HR function in your business that drives business growth potential, contact us today.