The PEO Revolution - SOI A Professional Employer Organization

THE PEO REVOLUTION Businesses are using the power of Professional Employer Organizations (PEOS) to improve productivity and profitability. PEOS assume the administrative functions of a human resources department and manage employment tasks such as; benefits, payroll, employment administration, risk management, and workers' compensation. PROBLEMS SMALL BUSINESS OWNERS FACE > III Rising Healthcare Costs Government Regulation Hours Worked Administration Costs HEALTH INSURANCE COSTS OVER THE YEARS > of small business employees with individual health plans pay $1,000+ in annual deductibles 40% Next Decade $30K Average Cost of Family Health Insurance Per Employee $26K $24K average cost $22K 2009 $20K $18K average cost $16K $28,530 $2K $4K $6K $8K $10K $14K $13,375 TIME SPENT ON BUSINESS > 33% 25% MOST of small business of small business employees work 33.8 hours a week of small business owners work owners work 50+ hours a week 60+hours a week Business Owners Spend Too Much Time on HR Administration Services From 1980 - 2000 the number of labor Owners of SBE/MBE spend up to 25% of their time on employment paperwork 67% laws/regulations grew by nearly 67% 25% COST OF EMPLOYEE BENEFITS > 78% The cost of Social Security, Medicare & unemployment insurance account for 35% of all wages/salaries in the US! of employees consider health insurance the 1960 2000 2011 most important benefit! 10% 21% 35% Without PEOS, many small businesses can't afford to offer a comprehensive and reasonably-priced benefits package Average annual cost of regulation, paperwork and tax compliance for companies 2$ = $1,000 $$$$$$$ $$$$$$$ $$$$$$$ less than 20 employees: $7,000 per employee less than 500 employees: $5,000 per employee more than 500 employees: $3,400 per employee PEOS IN ACTION > Professional Employer Organizations improve productivity & profitability by assuming the administrative functions of an HR department. 50% PEOS were the fastest 1990's of U.S. employees will be employed by Professional Employer Organizations (PEO) by 2020. growing business service in the U.S. during the 1960s 1970s 1980s 1990s 2000s 2010s U.S. workers with enhanced access to employee benefits = 200,000 U.S. workers from PEOS 20% Growth per year 2-3 Million WHY COMPANIES USE PEOS > 48% 41% 37% 37% To reduce cost of To reduce the cost of For HR services to To free up time to focus on core business competencies healthcare & benefits HR administration improve recruitment and retention What PEOS Offer Healthcare Benefits 97% Payroll and Tax Administration %, 97% HR Technology 84% Employee Services 79% Termination Processing X 70% Retirement Benefits 59% Training 52% 0% 25% 50% 75% 100% PEOS IMPROVE COMPANY SATISFACTION > 100% = PEO = No PEO 82% 75% 72% 71% 69% 55% 50% 46% 43% 37% 25% 0% Satisfaction with Satisfaction with Satisfaction with Satisfaction with quality of hire healthcare benefits time to fill employer brand PEOS SAVE BUSINESSES TIME > 12,679,604,730 10,837,269 small businesses in the US HOURS SAVED Most small business owners work more than 50 hours per week Estimated hours worked by US small business owners each year: 28,176,899,400 Up to 45% of small business owners' time is spent on HR tasks each year if all US small businesses worked with PEOS When asked 'What would you do with time saved by outsourcing HR tasks?" small business owners responded: 42% 50% 8% dedicate more time dedicate more time to growing their business to running their business other Unemployment & workers' compensation savings when working with a PEO Small business owners save approximately Company Size % Saved 100 hours a month 1-25 employees 40% by outsourcing HR tasks. up to 100 employees 25-35% What would you do with an extra 100 hours a month and money saved by using a professional employer organization? EXPLORE IF A PROFESSIONAL EMPLOYER ORGANIZATION IS RIGHT FOR YOUR BUSINESS. SOI www.soi.com 800.572.2412 SOURCES SOURCES http://www.napeo.org/peoindustry/industryfacts.cfm http://www.benefitspro.com/2011/09/01/2011-employer-survey?page=2 http://www.census gow/econ/susb http://esbjournal.com/2010/10/new-survey-shares-factors-that-will-drive growth http://www.cnbc.com/id/41969508 http://www.referenceforbusiness.com/small/Di-Eg/Employee-Leasing-Programs.html#b http://www.evancarmichael.com/Business-Coach/137/Entrepreneurs-Business-Falters-When-Time-Bosses-You.htm http://moneyland.time.com/2009/09/16/health-insurance-premiums-up-131-in-last-ten-years http://www.hrotoday.com/content/1313/peo-industry-transition http://www.georgiasbdc.org/pdfs/rassel03_2.pdf http://www.namasta.com/resources/payroll_service.php http://www.aberdeen.com http://employhr.com/hr-library/the-peo-industry © 2012 SOI Percent of Organization