American Time and Labor Company provides PEO services for the construction industry under its suite of services called LABORsuite.
What is a PEO?
A professional employer organization (PEO) provides comprehensive HR solutions for small businesses. Payroll, benefits, HR, tax administration and regulatory compliance are some of the many services PEOs provide to small and growing businesses across the country.
Why a PEO?
- By providing payroll, benefits, and HR services and assisting with compliance issues under state and federal law, PEOs allow small- to mid-size businesses to improve productivity and profitability, focus on their core mission and grow.
- Through a PEO, the employees of small businesses gain access to big-business employee benefits such as: 401(k) plans; health, dental, life and other insurance; dependent care; and other benefits they might not typically receive as employees of a small company.
Business Owners’ Experience with PEOs
- Ninety-eight percent of business owners who are PEO clients would recommend a PEO to a small business colleague.
- Seventy percent report that their revenues have increased since becoming a PEO client.
- Sixty-six percent report that their profitability has increased since becoming a PEO client.
Advantages of Using a PEO for Small & Mid-Size Businesses
- Annual median revenue growth for PEO users was twice that of comparable non-PEO firms
- Expected annual median revenue growth for PEO clients is 40 percent greater than that of comparable non-PEO firms
- PEO client firms were 16 percent more likely to report an increase in profitability
Since December 2004, employment at small businesses using PEOs has grown more than 7 percent faster than at small businesses overall, according to the Intuit Small Business Employment Index. Some advantages of a PEO for employees, compared to employees working in businesses that are not PEO clients, are that employees working in businesses that are PEO clients are significantly more likely to report that their employer:
- Demonstrates a commitment to them as employees (average response was 8 percentage points higher)
- Has good hiring practices (+8)
- Has good HR policies and practices (+5)
- Does a good job of designing employees’ jobs (+4)
- Provides employees with good training and development opportunities (+4)
Employees of PEO clients also report significantly higher scores on key measures related to employee satisfaction and confidence in company management:
- Levels of employee engagement (+5)
- Intention to stay with their current employer until retirement (+8)
- Belief that employer is taking the right steps to be competitive (+8)
- Trust that employer is supporting employees in delivering excellent customer service (+7); and
- Confidence in employer’s approach to growing the company (+5)