 |
| Contact: Edie Clark, NAPEO (703) 739-8162 edie@napeo.org |
|
| Contact: Edie Clark, NAPEO (703) 739-8162 edie@napeo.org |
|
Small Businesses with PEOs Hold Key to Job Satisfaction Alexandria, Va. (August 2, 2004) — Small businesses with good employee benefits boost worker job satisfaction and compete more effectively in the war for talent. The key to their success often is a professional employer organization (PEO), a powerhouse for benefits, human resources expertise and other employment-related services. Working with PEOs, small businesses can offer workers Fortune 500 quality employee benefits minus the hassle of administering the benefit program themselves. Typically the PEO benefit package includes health insurance, dental and vision care, life insurance, a 401(k) program, and an employee assistance program. PEOs handle the communication and paperwork associated with the benefits program so the business owner can focus on producing revenue. U.S. workers value quality benefits more than compensation, according to a recent research by the Society for Human Resource Management’s foundation. “Benefits” are second only to “job security” on the list of job satisfaction factors. “Small businesses want to add or upgrade their benefits to compete effectively for the best talent and retain good workers,” said Milan Yager, executive vice president of the National Association of Professional Employer Organizations (NAPEO). “They are learning that PEOs can provide great benefits efficiently and cost effectively. An estimated 40 percent of business clients entering a PEO arrangement significantly upgrade their total employee benefit packages.” That was true for Gene Gray, co-founder of Insurance Brokers, who chose the California-based PEO Your People Professionals. “YPP has a better benefits program than I can provide as a small employer,” he said. Small businesses with PEO arrangements are also more likely to offer workers a 401(k) retirement savings program in an era when access to 401(k) programs is dropping among small-business workers, according to the U.S. Small Business Administration (SBA). One reason is the cost barrier. Without a PEO, a business faces more than $7,000 to establish a 401(k) program. A business client of a PEO can avoid this expensive set-up fee by having its workers participate in the PEO’s plan. Another company that discovered the value of PEOs is Engineered Assemblies Corporation (EAC), a manufacturing company with about 100 employees. “We heard PEOs could provide Fortune 500 benefits to small companies, so we selected Compensation Solutions in New Jersey,” said Addie Cinquino, EAC’s vice president of operations. “When employees and job applicants compare us with other companies our size that do not have a PEO, we have so much more to offer.” For the small business owner, negotiating a benefits package and handling payroll are headaches a PEO can relieve. “When we started our company in 1999, we did not want to have to focus on benefits and payroll,” said Steve Rusche, co-founder and COO of eTapestry, a fundraising software development company. “Our PEO WorkSmart Systems (of Indiana) allowed us to start inexpensively and provide our employees with a good benefits package. We do not have to negotiate our own benefits, which is a great relief. We can also offer a 401(k) program, a big-company benefit, without having to administer it ourselves.” Small businesses need superior benefit packages to compete with large companies for highly skilled workers. There is a strong demand for pharmacy technicians, according to Chuck Wall, founder of Advanced Cardiac Solutions Inc. His firm specializes in long-term intravenous treatments and uses Better Business Solutions (BBS), an Alabama-based PEO. “We have been able to compete against large hospitals when recruiting pharmacy techs,” he said. “BBS provides a competitive benefit package and tells me how to gauge the rest of the industry so I can compare my benefits with the larger companies.” Workers in small businesses also appreciate the confidentiality that a PEO offers, noted Nancy Peckham, president of INI Global, which advises clients on telecom/IT cost containment services. “QTI Human Resources maintains the confidentiality of our employees’ benefits information. If they want to talk with someone about an issue, they can talk with a QTI representative.” Given their value to their clients, it’s no wonder the PEO industry maintains a nearly 90 percent retention ratio. “PEOs are one of the best competitive strategies,” said John Hovey, president of the PEO
Merit Resources in Iowa and a member of the NAPEO Board. “With a PEO, a small company gains competitive strength and time to focus on the core purpose of the business, and the workers are happier and more productive. That’s a powerhouse combination.” For more information on the PEO industry, visit the NAPEO Web site: www.napeo.org NAPEO, the National Association of Professional Employer Organizations, is the recognized “Voice of the PEO Industry.®” NAPEO has 340 members found in all 50 states, representing more than 70 percent of the industry's revenues. Professional employer organizations enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers’ compensation. PEO clients focus on their core competencies to maintain and grow their bottom line. NAPEO |