If you own a small or medium-sized business, you definitely know the basics of PEOs: they take care of payroll, benefits, and some compliance so you can focus on growing your business. That part is true, but it’s only the surface. Most owners only see around 30% of what a good PEO accomplishes. The rest works silently in the background to make sure your business runs smoothly, keeps you safe, and makes sure your team performs well every day.
And the impact is real. Companies that work with PEOs grow 7–9% faster and are 50% less likely to fail, according to statistics from 2025. You won’t achieve these outcomes from just processing paychecks.
PEOs are no longer niche. They interact with millions of employees at worksites, and hundreds of thousands of client organizations across the U.S. Independent studies show that companies that work with a PEO see real benefits. For instance, PEO clients have better survival and growth rates than their competitors. About half as many small firms that employ a PEO go out of business in a given year, and several studies show that members get good ROI and save money.
Recent research from the industry shows that 15% of all firms with 10 to 99 employees now deal with PEOs. This is up from only 7.85% in 2008. Around 173,000 enterprises with 4 million workers are currently served by the PEO industry. That’s about how many people work at Walmart, Amazon, Kroger, and Home Depot together.
Below are the familiar benefits that make PEO services a popular choice:
PEOs arrange group health, dental, vision, and retirement plans for many small businesses that they can’t get on their own. That makes your pay package competitive without going over budget.
PEOs take care of payroll, tax filings, and quarterly deposits in more than one state. That lowers the risk because late taxes or incorrectly filed returns cost a lot of money, and a PEO takes care of those business issues every day.
PEOs keep an eye on changing restrictions (such as state wage legislation, leave requirements, and reporting) and help put in place policies and safety programs that lower claims and fines.
Outsourcing HR administration lets founders and small HR teams focus on product, sales, and growth instead of paperwork.
Having better perks and professional HR support makes it easier to find and keep good employees. PEO clients have lower turnover rates than non-clients.
Good PEOs offer more than just payroll and benefits. Here are six services that don’t get a lot of attention but are quite useful:
PEOs often do studies on wages and assist you in determining fair pay ranges. That implies fewer shocks when hiring, more fairness inside the company, and offers based on data when you’re hiring.
How can you tell if your crew is pleased, interested, and planning to stay? Most business owners go with their gut or wait for people to quit. Neither method stops the costly shock of sudden departures. Some PEOs run pulse surveys, look at the results, and make strategies for what to do next. That’s a cheap approach to finding morale problems early and keeping people on the job.
When you run a business every day, you don’t have much time to think about the broader picture. But strategic planning is what will make your business successful or just get by. In addition to hiring, the best PEOs help you establish career paths, find future leaders, and make succession plans so your organization doesn’t stop when people leave.
PEOs that offer learning resources have coaching and leadership modules that a small business wouldn’t be able to afford to buy on its own. Coaching usually has a return on investment (ROI) of 300–500%, which is one of the best hidden benefits of working with a PEO.
You can see dashboards that show you how quickly you’re recruiting, how often you’re using benefits, how many claims you’re getting, and how much it costs to hire someone. This information helps you make better budget choices.
Your workers have personal problems that make it hard for them to do their jobs, like money problems, family problems, mental health issues, drug misuse, or legal troubles. Most small firms don’t have the money to help their workers through these tough times. EAPs give people counseling, aid with money and the law, and support in times of distress. When pooled through a PEO, they become cheaper and typically increase productivity and lower absenteeism.
These are all part of current peo benefits administration services, and they assist in turning HR from a cost center into a strategic advantage.
A short checklist:
If you decide to go ahead, ask PEOs for example invoices, payroll simulations, benefit comparisons, and customer references in your field.
Choosing the proper PEO is more than just picking a payroll company. It’s picking a partner that will improve your benefits, make administration easier, and help your team in ways that most businesses don’t even know are possible. When you get past the sales pitch and look at the technology, references, and measurable results, the appropriate PEO becomes a strategic asset instead of just another HR responsibility.
OEM America can help you save money, get more done, compare costs, or just get leaner and more focused. You can get up to four hours of help from an expert and a complimentary study that shows you how to save $1,000 per employee (terms apply). Want to know more? Call 860.528.5555 or fill out the contact form, and we’ll get back to you straight away. OEM America is a member of NAPEO and an accredited business; it is here to help you reclaim your time and build a stronger, more efficient organization.
A: Primary benefits include access to stronger employee benefits, accurate payroll and tax processing, compliance support, HR admin offload, and improved recruitment and retention via better total rewards. A: Savings come from lower benefit premiums through group purchasing, fewer compliance penalties, reduced HR headcount needs, and operational efficiencies. Many studies report measurable ROI for PEO clients. A: Typical elements are group health plans, retirement plan administration, enrollment and eligibility management, COBRA/benefits compliance, and vendor negotiation. A: Ask about compensation benchmarking, employee surveys, succession planning, corporate coaching, workforce analytics, and EAPs — these often deliver outsized value for growing firms. A: If you’re scaling, hiring across states, want better benefits for recruitment, or are tired of payroll headaches, a PEO is worth evaluating. If you’re tiny (under ~10 employees) and don’t plan rapid growth, alternatives might be cheaper. Q: What are the primary benefits of a PEO?
Q: How does a PEO save money for small businesses?
Q: What’s included in PEO benefits administration?
Q: Which surprising services should I ask about?
Q: Is a PEO right for my small business?