PEO Clients in the COVID-19 Pandemic: Follow-Up Analysis

Whitepapers

Professional employer organizations (PEOs) provide comprehensive HR solutions for small and mid-sized businesses. These services frequently include payroll, employee benefits, HR, workers’ compensation, risk management, and more. In white papers released in previous years, we have found PEO clients enjoy a wide range of improved financial and non-financial outcomes relative to their peers who do not use PEO services. These benefits include higher business survival rates, higher growth rates, lower employee turnover, and higher employee satisfaction.

The COVID-19 pandemic has provided a new set of challenges that all businesses have confronted over the last year and a half. This white paper explores the effect that PEOs have had on business outcomes for their clients over the course of the pandemic to date, building on findings in the 2020 NAPEO white paper that undertook a short-term analysis of PEO impacts during the initial months of the pandemic.

In particular, this paper explores how PEO clients have fared from early 2020 through July 2021 across a range of different measures in the following broad categories:

• Business operations;
• Changes in employment; and
• Success in accessing major government support programs.

Overall, we found that, as of July 2021, PEO clients are doing better in each of the three categories, as discussed in additional detail in the sections below. As a result, PEO clients are also in a stronger position for future long-term success than other comparable small businesses.

The discussion in this paper explores in additional detail multiple metrics in each of these categories, typically comparing data on PEO clients to the best available information on comparable small businesses. Full technical information on all data sources and calculations is included in the “Technical Notes” section at the end of the paper.