NAPEO Study Finds Higher Business Survival Rates, Lower Turnover for Businesses Using PEOs
Proquest LLC |
Businesses that use professional employer organizations for HR, benefits, and compliance have a significantly higher rate of business survival and a lower rate of employee turnover than businesses that don't use PEOs, according to a new study released by the
The study, by noted economists
"It's very simple: Small businesses that use PEOs grow 7-9 percent faster, have employee turnover that is 23-32 percent lower, and are 50 percent less likely to go out of business than companies that don't use PEOs," said
According to a media release, PEOs provide payroll, benefits, tax compliance, and other HR services to small and mid-sized companies. Approximately 250,000 businesses use PEOs, and PEOs provide access to healthcare coverage for as many as 6 million people. 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.
The study showed that the overall employee turnover rate in
"Across all industries, this study shows that there are clear advantages for PEO clients on two of the most fundamental issues faced by any business: retention of employees and continued survival," said Cleary. "PEOs make it possible for companies to retain their best and brightest employees and focus on their core business, which helps them survive and grow."
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