A growing business is a good problem to have, but it’s still a problem when your internal HR can’t scale as fast as your vision. Whether your business is expanding across state lines or navigating the changing landscape of employee benefits, the complexities of managing people can feel like it’s taking more time and energy than it should. That’s why more growth-stage companies are turning to Professional Employment Organizations (PEOs).
But what is a PEO, exactly? How does it work? And is it worth making the switch?
Making a change to your HR model is a big decision. LBMC Employment Partners is a PEO-first company built to support growth-focused businesses with the high-touch, high-trust HR, payroll, and benefits solutions they need to scale. When you work with us, you don’t get ticketing systems or an 800 number. Instead, you work with real people who help guide your transition and ensure you feel confident every step of the way.
In this post, we’re unpacking what a PEO is, how it works, and why it’s a smart business move in today’s economy.
A PEO is a human resources partner that helps businesses manage critical employee-related tasks like payroll, workers’ compensation, benefit administration, and tax and regulatory compliance through a co-employment agreement.
Here’s what that means: You retain control of your business operations and people decisions. The PEO becomes the employer of record for tax and insurance purposes, allowing us to handle all administrative responsibilities on your behalf.
That shared relationship can give you access to big-company perks and expertise, without having to build an internal HR department from scratch.
For growing companies, a PEO becomes a single point of contact for:
In short, a PEO takes the weight of HR off your plate so you can focus on building your business.
Partnering with a PEO isn’t just about saving time. It’s a strategic move that can fuel your business’s growth and strengthen your workforce. Here’s how:
Most growing businesses can’t afford to offer enterprise-level benefits on their own. A PEO pools employees across clients, giving your people access to high-quality health plans, retirement options, and more at competitive rates.
FACT: Among companies with 10–49 employees, 52% of PEO users offer retirement plans, compared to just 23% of non-PEO users. (Source)
From the moment someone applies to the moment they reach their first anniversary, every touchpoint matters. With a PEO, you’ll streamline onboarding, ensure timely payroll, and offer benefits that keep employees around for the long haul.
FACT: PEO clients see 12% lower employee turnover. That’s no surprise when your benefits stand out. (Source)
Not every business is ready (or able) to build a full HR department. With a PEO, you get access to HR pros who live and breathe compliance, employee relations, and policy creation so you don’t have to.
FACT: The average ROI of a PEO is $1,775 per year per employee. (Source: NAPEO)
If you’ve ever had to scramble to understand new state labor laws or file a last-minute payroll tax correction, you know how stressful compliance can be. A PEO keeps you up-to-date and compliant, so nothing falls through the cracks.
Your time is too valuable to be spent troubleshooting benefits or researching PTO laws. A reliable and hands-on PEO like LBMC Employment Partners gives you the freedom to focus on strategy, sales, and service, while we handle the rest.
FACT: PEO users report 16% higher profitability and double the median growth of non-PEO companies. (Source)
Instead of juggling multiple vendors and platforms, a PEO consolidates your HR, payroll, benefits, and compliance into one integrated solution. You can work with one centralized team that knows your business and has your back.
Every hour you spend buried in payroll spreadsheets or troubleshooting benefits is an hour you’re not focused on customers, strategy, or growth. A PEO takes on the time-consuming HR admin that eats into your day so you can get back to leading your business.
FACT: Small business owners spend an average of 18 hours per month on HR and related tasks. (Source)
We serve a wide range of industries, each with unique challenges and compliance requirements. Here’s how a PEO model makes a difference across sectors:
With a PEO, healthcare providers can better manage high turnover, evolving insurance and governmental regulations, and critical safety training needs. We help healthcare leaders ensure compliance with OSHA and HIPAA, streamline payroll for clinical and non-clinical staff, and offer competitive benefits to improve retention.
In client-focused industries, your people are your product. A PEO helps attract top-tier professionals through competitive benefits and smooth onboarding while ensuring your internal policies and handbooks are airtight.
Managing staff across multiple locations (and sometimes states) can quickly get complicated. A PEO consolidates payroll, compliance, and benefits across locations to reduce risk and increase efficiency so you can scale with confidence.
Running lean is part of the job, but HR shouldn’t fall through the cracks. Nonprofits and new ventures benefit from the structure, support, and cost-efficiency of a PEO model, especially when trying to offer retirement plans or retain key staff on a budget.
For businesses with field-based teams, safety and compliance are non-negotiable. PEOs can enhance manufacturing success by helping companies reduce workers’ comp claims, implement OSHA-compliant safety programs, and manage payroll and taxes for hourly or shift-based workers across state lines.
Choosing to work with a PEO can be a game-changer, but it’s important to understand how the model works, what to expect, and how to select the right partner.
Not all PEOs are created equal. Some may focus on providing basic payroll and administrative support, along with standard benefits and limited access to additional HR services. Other PEOs offer customers access to advanced technology platforms, including self-service tools.
When evaluating your options, it's important to choose a PEO that not only offers the services and tools you currently require but also has the ability to grow and evolve with your business over time. Here are some questions to consider while looking for the right fit for your business:
LBMC Employment Partners can be a true extension of your team. Our people-first approach means you get real answers from real experts, not automated replies or call center scripts. From our Nashville headquarters, we support clients across the country with scalable, strategic HR solutions designed to help your people and your business thrive. Our team is happy to answer any questions you may have about what a PEO partnership with us can do for your business. Contact us today.