Emerging EB Business Insights
How PEOs Can Support Small Businesses
MAY 5, 2026
Small businesses have a wide range of responsibilities when it comes to managing employees, from recruiting and retention to benefits administration, risk management, and compliance. Yet many employers lack the resources to effectively manage these competing and often complex priorities.
Partnering with a professional employer organization (PEO) can provide the structure, expertise, and scale needed to compete for talent and manage risk, without diverting focus from core business goals.
Why Partner With a PEO?
Companies in a PEO arrangement:
|
Grow 2x |
|
Have 12% |
|
Are 50% less likely |
|
14% of U.S. employers with |
Source: NAPEO
How Do PEOs Support Small Businesses?
PEOs are outsourcing firms that provide smaller companies access to the same benefits and amenities available to much larger organizations, including:
Full-service HR support. Depending on the arrangement, PEOs generally take on the responsibility of routine and often redundant administrative HR tasks, giving business owners time to focus on core competencies and grow the bottom line.
Expertise on demand. Many PEO organizations have HR, employment law and accounting professionals on staff, providing valuable expertise and reducing exposure to liability without the overhead expense of hiring and maintaining additional departments.
Benefits administration. In addition to managing benefits programs and associated administrative tasks, PEOs can give businesses access to more robust and affordable benefit plans such as 401(k), health, dental, life, disability and other insurance. PEOs can also negotiate better group rates, helping businesses offer more competitive benefits at a lower cost.
Risk management. PEOs help businesses manage employment-related risks such as workers’ compensation insurance, employment practices liability insurance, and workplace safety programs.
PEOs can provide significant return on investment for employers, with average cost savings around 27%.
Get Started With a PEO
To help you evaluate and choose service providers, USI’s PEO experts leverage our extensive marketplace knowledge. We offer:
- Needs assessments. We help you identify your company’s specific benefits, HR, compliance, insurance and technology needs.
- Vendor recommendations. We conduct an independent analysis of the PEO marketplace and provide custom recommendations on top vendor providers.
- Benchmarking and negotiation. We benchmark and negotiate appropriate rates and terms to ensure you have access to the best price.
- Ongoing support. We provide expert implementation support to ensure a smooth handoff, as well as ongoing service and support with renewals.
Seamlessly Transition Between PEO Providers
Many employers stay with their current PEO out of concern of the cost and time to switch to a different provider. As a result, plans and services may no longer meet employers’ needs.
How USI Can Help
USI helps clients that have outgrown their current provider evaluate alternative PEO options better suited to their needs. Our PEO specialists actively assist in the transfer to ensure a smooth transition between PEOs.
Smaller businesses looking for a competitive edge should consider the benefits of outsourcing to a PEO. Contact your local USI benefits consultant or email ebsolutions@usi.com to learn more.
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