Average Client Of PEO Can Expect An ROI Of 27.2% For Their Investment According To New Study

Home » Blog » Average Client Of PEO Can Expect An ROI Of 27.2% For Their Investment According To New Study

According to a recent report issued by the National Association of Professional Employer Organizations, or PEO’s,  based on cost savings alone, the average client of such organizations can expect a return on their investment of 27.2 percent. 

Yahoo! Finance recently reported on their website that at a recent conference held in Austin, Texas, economists Laurie Bassi and Dan McMurrer of McBassi and Associates presented the findings of their seventh study on the benefits of businesses who utilized the services of PEO organizations.  Among the benefits to small and medium sized businesses using a PEO over other forms of human resource management were:

  • Greater profitability, innovation, agility,and overall company growth
  • Higher satisfaction among employees
  • Lower employee turnover

Among the areas where clients of PEO’s save are in the areas of:

  • Health benefit costs
  • Workers compensation
  • Unemployment insurance
  • HR personnel costs, administration of benefits, payroll and other expenditures

Bassi and McMurrer estimate that companies can save $1,775 per employee per year on average.  Those kinds of results as it relates to ROI may be enough of an incentive for managers and businesse owners who have been thinking of using a PEO, but haven’t done so yet. 

NAPEO President & CEO Pat Cleary told Yahoo! Finance, that the industry has long known that using a PEO can be good business for many companies in a number of ways and that the figures presented of a return on investment offers compelling data for those thinking about using a PEO.

“When you put this new data on costs savings and ROI together with the data we already had on business growth, turnover, survival and employee satisfaction, it’s clear that there really is no better value proposition than PEOs in the HR space.”