HR 101

Solving Common PEO Challenges

Pat Brothwell

PEO professionals discuss the solutions to common PEO challenges.

Professional Employment Organizations (PEOs) provide HR services to 175,000 small and medium-sized businesses (SMBs) and employ more than four million people. The number of worksite employees overseen by PEOs is equal to the four largest employers in the U.S. (Walmart, Amazon, Kroger, and Home Depot)—15.3% of SMBs in the U.S. partner with a PEO for their HR activities.

It’s an excellent time to be in the PEO business, yet as with any industry, there are always challenges to overcome. This post will go over some common PEO challenges and how to solve them.

Communicating the Value of a PEO
Retention and Recruiting
Keeping Up with HR Trends
Remaining Competitive
Related Resources

How to Solve Common PEO Challenges

PEO Challenge: Communicating the Value of a PEO

Despite their prominence, many people are unfamiliar with PEOs and the value of employing the services of one.

Solution: Educate Your Staff!

You want to educate your customers on why PEOs are essential, starting with educating your entire staff. You want to make sure that everyone at your organization can quickly and efficiently communicate why a PEO is so valuable to current and potential customers. Each team member should fully understand your value proposition and the benefits of your services. They should be able to utilize stats about PEOs and answer common HR questions, even if it’s outside the realm of your core expertise (and if they can’t answer the question themselves, they should be able to direct askers to resources that do).

Powerful PEO Stats Your Staff Should Know

PEOs help small businesses develop 7 to 9% faster and are 50% less likely to fail.
Organizations that utilize a PEO have 40% better revenue growth, 14-16% lower turnover rates, and are 50% less likely to go out of business than those that don’t.

PEO Challenge: Recruiting and Retention

Recruiting and retention are evergreen challenges your clients will seek your help with, but HiringThing has heard directly from many PEO professionals who said that in the current hiring climate, customers are requesting more recruiting help than ever.

While most PEOs will already have a robust software solution in place to cover the full breadth of the employee lifecycle, having a customized, branded, bespoke recruiting solution for recruitment is crucial in 2022.

Solution: Private Label an Applicant Tracking System

Private labeling an applicant tracking system (ATS)—recruiting software built to streamline and automate the hiring process—is a quick and efficient way for your PEO to offer a seamlessly integrated tech stack covering the full breadth of the HR cycle. Private-label software is purchased by a company from a SaaS provider and customized with branding and bespoke workflows. Private label purchasers work with private label providers as a mutually beneficial partnership versus the traditional buyer/client relationship.

You may have also heard private labeling called “white labeling.” Though often used interchangeably, there’s an essential difference between the two. White-labeled platforms are produced by a SaaS developer and rebranded by other companies. Private labeling takes this to a whole new level by customizing the platform to fit an organization's specific needs and working closely with them throughout their partnership’s tenure.

HiringThing private labels an applicant tracking system—recruiting software used to automate and streamline the hiring process—which all PEOs can benefit from. Read how below.

PEO Challenge: Keeping Up With HR Trends

HR trends mirror global trends and can change quickly. We’ve just seen this happen during the pandemic, where a study found that “Close to 80% of organizations surveyed said they have implemented or expanded universal work-from-home policies as a result of COVID-19, while 67% expect these policies to remain in place either permanently or for the long-term.” Keeping up with HR trends can seem exhausting, but there’s an easy solution that separates proactive and reactive PEOs.

Solution: Think Ahead

There’s no magic solution for this one. As the HR departments for your customers, it’s up to PEOs to ensure they’re up to speed on pertinent HR trends. The best advice we could give organizations is to be proactive and not reactive regarding what HR will look like.

No one could have predicted how fast we had to pivot to remote work during the recent pandemic, but remote work had been trending upward—the number of remote workers in the U.S. rose 173% between 2005 and 2018. While we commend how quickly PEOs pivoted to learning and adapting to the “new normal,” those who had already started investing resources into remote work were at an advantage.

Trending upward initiatives to watch, research, and brainstorm for include:

Recruitment and retention.
Remote and hybrid work.
Flexible schedules.
DEI initiatives.
Wellness.
Strength-based learning and development.
Upskilling as AI changes the workforce.
Catering to Gen Z.
Balancing the gig economy with traditional jobs.
A greater emphasis on work/life balance.
Focus on soft skills.
Salary transparency.

PEO Challenge: Remaining Competitive

There has never been a better time to be in the business of a PEO. PEOs represent 13.7% of all employment by private-sector employers with 10 to 99 employees, and experts expect that number to grow. This growing field means current PEOs must remain competitive to grow and thrive.

Solution: Offer an Impeccable Customer Experience

66% of customers expect service providers to understand their needs. Customers will spend more for a good experience (10% more in almost every industry), and customer-centric companies are 60% more profitable than companies that aren’t. You can have the best products and services around, but in today’s climate, what separates competitive organizations from those that aren’t is the kind of customer-centric organization customers clamor to work with.

Some tips for creating a great customer experience include:

Efficient, comprehensive onboarding.
Maintaining a helpful, positive attitude.
Having responsible, meaningful customer service.
Creating resources like a knowledge base so customers can help themselves.
Proactively reaching out to customers for questions, insights, and temperature checks.
Listening to your customers.
Not making empty promises.
Regularly offer your customers educational opportunities.

Related Resources

About HiringThing

HiringThing is a modern recruiting and employee onboarding platform as a service that creates seamless talent experiences. Our white label solutions and open API enable technology and service providers to offer hiring and onboarding to their clients. Approachable and adaptable, the platform empowers anyone, anywhere to build their dream team.