Professional Employer Organizations have become increasingly popular among small and midsize businesses. What’s causing this surge in popularity? The growing economy, changing workforce and new regulations all play a role:

  • The War for Talent – As companies continue competing for top talent following the recession, robust benefits packages help them become employers of choice. During the past 12 months, 38% of HR professionals report that their organizations leveraged benefits programs to recruit employees at all levels, according to SHRM’s 2015 Strategic Benefits Survey,
  • Engaging EmployeesGallup research from January 2016 found that only 32% of U.S. workers are engaged in their jobs. The majority of employees, some 50.8%, are "not engaged," while another 17.2% are "actively disengaged.” Creating a work environment that reflects employees’ desires can help businesses improve engagement and reduce turnover. However, developing this environment often requires help from trained professionals.
  • Navigating Regulations – The Affordable Care Act is just one example of highly complex regulations that employers need to understand and manage. As employment laws continue to evolve, businesses are leaning on experts to help them remain compliant and avoid fines.

As the workplace continues to change, managing talent and complying with complex regulations like the ACA are causing employers of all sizes to learn new ways to adapt. But for smaller employers this can be particularly challenging, since most don’t have the time, manpower or expertise to manage these tasks on their own.

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"By actively working with employers to help them navigate this new landscape, PEOs allow SMBs to remain focused on what most matters to them: driving growth and growing the bottom line."

Fortunately, SMBs don’t have to go it alone. Advisers can provide them with the option of partnering with a PEO to outsource HR and benefits administration, while maintaining control over day-to-day operations. By establishing a co-employment relationship with a PEO, SMB employers can better focus on their business objectives, while providing more robust benefit offerings, such as comprehensive health benefits, retirement plan options and employee growth and development programs.

Today’s workplace is shifting. By actively working with employers to help them navigate this new landscape, PEOs allow SMBs to remain focused on what most matters to them: driving growth and growing the bottom line.

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Maria Black

Maria Black

Black is president, ADP TotalSource.