Let the Experts Handle It

As the economy’s stranglehold has forced companies to cut staff and streamline functions, many are turning to professional employer organizations (PEOs) to handle functions that can’t be downsized, such as payroll, employee benefits, workers’ compensation claims and other administrative operations. PEOs allow companies to focus on their core business while ensuring that those support tasks are handled reliably and professionally. 

Like other building and development companies, Bonita Bay Group was hit by the housing crash: it has been cutting staff and streamlining for the past couple of years. In 2008, it hired Bonita Springs-based Veritas Employer Services to handle some of those tasks. 

“It does help with overhead,” says Bonita Bay Group’s human resources director, Peggy Taylor. “There are some economies of scale when you go with a company that can do a lot of those things for you, and I don’t have to worry about the day-to-day things they’re better at.” 

According to the National Association of Professional Employer Organizations (NAPEO), the PEO industry saw gross revenues of $68 billion in 2008, and according to data released in May, those revenues are projected to increase 20 percent in 2009. 

PEOs are not only hanging on to their existing clients, they’re acquiring new ones who see the cost and time savings in outsourcing. “On the new client acquisition side, things are booming; on the current client side, things are holding steady,” says Carrie Aaron, president of PEO Network Inc., a consulting firm for the PEO market based in Durham, N.C. 

There are about 700 PEOs in the United States, and it’s estimated that some 300,000 U.S. businesses currently use their services. 

“More businesses are starting to realize that PEOs are really good at this [human resources] thing, and they see how important HR is to the success of their business,” says Milan P. Yager, executive vice president of NAPEO.