Meeting-1196If you are operating a small business in Massachusetts, chances are that you know what a Professional Employer Organization (PEO) is. The truth is in the numbers. Data released by the National Association of Professional Employer Organizations (NAPEO) in collaboration with the Employer Services Assurance Corporation (ESAC), show that 1,186 employers in Massachusetts are partnering with an ESAC accredited PEO as of September, 2014.

Since national estimates indicate that 60-65% of employees paid through a PEO do so with an accredited firm, it could be that as many as 2,000 employers in Massachusetts use a PEO. Using an average worksite employee count of 25, as many as 50,000 workers in the Commonwealth could receive a paycheck from a PEO. The increase in recent years is remarkable, especially since a generation ago; the PEO industry was almost unheard of in New England. Florida, California and Texas were the early adopters and Massachusetts was barely on the radar screen. Today, the Commonwealth ranks 8th in the nation, behind Florida, California, New York, Texas, Georgia, New Jersey and Hawaii respectively.

So why do more businesses than ever see the value of a PEO partnership? The reasons are many. Here’s eight.

1. Although PEO clients are small, they are able to offer a broad away of benefits to their employees at lower cost than companies who don’t use PEOs.
2. Many of these benefits (e.g., retirement plans) have much higher participation rates among employees of PEO clients.
3. These benefits play a major role in helping businesses attract and retain employees.
4. The broad array of HR services offered by PEOs also makes it possible for executives to focus their attention on the core business.
5. All of these factors pay off: PEO clients have higher growth rates than other small businesses.
6. The employee turnover rate for PEO clients is 10-14% lower per year than that of comparable companies, depending on data specification.
7. Businesses that use PEOs are approximately 50% less likely to fail (permanently go “out of business”) from one year to the next when compared to similar companies in the population as a whole.
8. Across all industries, this study shows that there are clear advantages for PEO clients on two of the most fundamental issues faced by any business: retention of employees and continued survival.

(Sources: Professional Employer Organizations: Fueling Small Business Growth – McBassi and Company, September 2013 and Professional Employer Organizations: Keeping Turnover Low and Survival High – McBassi and Company, September, 2014).

Furthermore, Milliman, a world leader in actuarial and related products and services, reported the following in a recent presentation at NAPEO’s 2014 annual conference: “For the majority of small businesses, well constructed PEOs are the best option.” We couldn’t agree more.

More and more small businesses in Massachusetts are seeing the value of partnering with a PEO and recent studies continue to support this sea change in the employment model. And of course, for Massachusetts businesses, we would contend that Genesis HR Solutions is the PEO of choice for the following reasons:

• Genesis is the only PEO headquartered in Massachusetts. This means that our staff of HR professionals is ready and able to service our clients efficiently.
• Our client retention rate is well above the industry average.
• We have operated as a PEO in Massachusetts for 24 years, longer than any in the industry.
Blue Cross Blue Shield of Massachusetts is our healthcare partner, making Genesis the only PEO in Massachusetts to offer this premier coverage to our employees throughout the country. (Genesis currently has worksite employees in 42 states).
• Genesis is able to work with clients who have operations in all 50 states, 27 countries in the European Union as well as many other countries worldwide.
• Genesis has been continually accredited since 1996 by ESAC, longer than any PEO operating in New England.

If your business is based in New England, it makes sense for you to explore the PEO partnership. Many in Massachusetts already have, and by all counts many more will do the same.

For more information on the benefits of a PEO partnership, please reach out to Genesis HR Solutions at or 800-367-8367.

Genesis HR Solutions is the premier PEO provider for Massachusetts based businesses.