PEOs Are Helping Small Businesses Survive the Pandemic - Allevity

What can businesses do to survive the pandemic? 

Thanks to COVID, the idea of thriving has gone out the window—for thousands, the game is now survival. And the fact is, PEO clients have been more likely to survive the pandemic in 2020. 

“Regardless of industry, PEO clients are far more likely to currently be open than other small businesses,” stated a September summary report from NAPEO (the National Association of Professional Employer Organizations). “This finding likely reflects the key role of PEOs as knowledgeable partners positioned to help clients maneuver through the numerous new regulations necessary before being able to reopen safely for business.” 

The numbers don’t lie: In the NAPEO report, small businesses who partnered with PEOs were better off than those who did not use the help of a PEO.

PEO Clients Are Surviving in the Pandemic

Namely, PEO clients were: 

• 119 percent more likely to have received a Paycheck Protection Program (PPP) loan,  
• 72 percent more likely to have gotten a Round-1 loan,  
• 91 percent less likely to be closed temporarily, and  
• 60 percent less likely to have permanently closed. 

Conservative figures, in fact, estimate that 115,000 PEO clients received PPP loans—while 98 percent of all PEO clients’ applications were successful. And it wasn’t just about getting loan paperwork in on time, either. A professional-grade employee administration partnership allowed those who stayed in business not only to survive the pandemic but to conduct their business.

Business survival rates are simply stronger for small businesses who are PEO clients. 

The current crisis indicates the value of a PEO. But the truth is that the PEO is a crucial quality-of-life partner in any situation. If you’re unfamiliar with the gold standard of HR and payroll outsourcing, check out our introduction of the PEO here.

What is a PEO?

In short: 

• PEOs allow you to step back and focus on what you know, while they step in and help with what they know—payroll and HR needs.  
• Hiring a PEO means outsourcing the paperwork side of things and turning your focus back to your business. You are still responsible for hiring, firing, and supervising your staff. But the PEO makes sure you remain compliant with HR and payroll laws, while also acting as a resource for your staff and ensuring they are paid timely and accurately.
• And PEO service goes beyond simply outsourcing HR. They are often able to arrange better deals on health insurance policies for your company because they work with thousands of other companies as well. This gives them more negotiation power than you could ever have as a singular small business. 

The reality is that COVID has made business operations more challenging for everyone. But, as the data show, PEO clients have experienced a level of insulation from challenges—failure to get loans, business interruptions, or even business closures—that other businesses have not been as fortunate to avoid. 

With a national permanent closure rate 60 percent better than the national average, it’s clear that being a PEO client pays for itself. 

“The PEO [is] an additional source of business guidance for each client,” the NAPEO report summarized. “Such a source is particularly valuable in navigating through a time of uncertainty and new complexities.”

Should I Work With a PEO?

Is your small business still looking for help surviving in the era of the coronavirus? If so, let’s talk! PEO-level service might be just what you need to help you put your focus back on your business.