Small/medium businesses that lack the internal expertise or talent for their growth needs now have a right-sized PEO resource
Denver, CO, and Austin, TX — June 15th, 2021: In the perennial struggle of small- and medium-sized businesses to look and operate like large enterprises — including realizing large enterprise profits — professional employer organizations (PEOs) have emerged as highly valuable resources. PEOs offer a range of HR-related services and may help provide access to aggregated, larger-scale benefits resources on SMB-level budgets. However, conventional PEOs tend to be large, lumbering, and prone to inefficient, one-size-fits-all offerings. Today, Thrive HR Consulting, a fractional CHRO and HR services specialist, announced the formal launch of its “mini PEO” solution suite for U.S. businesses. A mini PEO is much like a conventional PEO, only scaled and modularized appropriately for the real needs of most SMB clients.
PEO Perks and Pitfalls
Businesses lean on PEOs for their industry expertise/advice and ability to help offload non-core, HR-associated tasks. According to the National Association of Professional Employer Organizations, PEOs offer small businesses many benefits, including:
• 7% to 9% faster growth than businesses without a PEO
• 10% to 14% lower employee turnover
• 50% lower chance of insolvency
• Lower administrative costs of roughly $450 per employee
An ROI of 27.3% on PEO expensesThat rosy picture can come with a price, though. According to Thrive HR co-founder Jason Walker, “In the old days, a PEO could save clients money on the benefits side. That’s often not the case now, even though there are so many ways to put in benefits packages. You’ll also see that most PEOs charge a fortune. One of the bigger providers costs almost $200,000 — just for engagement. It’s unnecessary. Thrive’s mini-PEO offering is a fraction of that.”
Thrive divides its mini-PEO services into several areas:
• Employee benefits and compensation
• Employee relations
• Compliance (including risk mitigation)
• Culture and work improvement
• Diversity and inclusion
• Social media
• Cloud-based HR platform onboarding and management
Some of these offerings are expected of any PEO, but some are exceptional. For example, most PEOs won’t address needs such as culture, staffing, and branding to potential hires (via social media). These are non-traditional PEO services that are difficult to accommodate in the bulky, canned approaches of larger organizations. In contrast, Thrive HR, as a smaller PEO, has the ability to interface with many business stakeholders and customize unique service suites tailored exactly to the organization’s needs. A large PEO could bring in additional help to address something like company culture, but that would exacerbate the already-high fees and likely not provide the level of detail or holistic integration that Thrive HR, with its extensive experience in culture and HR, can provide.
With HR experience ranging from startups to the Fortune 500, Thrive HR leaders understand the needs of growing businesses and how to most effectively address those needs across time. They recognize that it is disadvantageous for smaller firms to pay for a conventional, all-or-nothing PEO package. Instead, Thrive HR takes a modular approach and encourages businesses to only engage with the services they need at a prudent scale. When those services need to expand with success, Thrive understands how to implement those changes without business disruption.
“A major issue with large national PEOs is that they have a very difficult time preserving or helping to establish a culture of a company they represent,” says Michelle Griffin, CEO of successful Florida-area PEO services provider Griffin Resources. “The other issue is that large PEOs are not customer services-focused. They have rigid policies and procedures that they follow, and they are not allowed to use what we call ‘business logic’ to solve issues. Mini or regional PEOs can also move more nimbly than larger PEOs and more quickly address real-time business issues in ways larger PEOs can’t or won’t.”
As the U.S. economy continues on it’s post-pandemic economic recovery, companies are regrouping and reassessing their operations. They need to save money, take new stock of HR concerns, and construct a “new normal.” For SMBs, a mini PEO partner like Thrive HR can be a key component for achieving a more tax-advantaged stance, a more productive and motivated workforce, and a revitalized balance sheet.
About Thrive HR Consulting:
Thrive HR Consulting is a Silicon Valley; Austin, TX; and Denver, CO-based, minority-owned HR Advisory that provides fractional CHRO Support and value-based HR support. Thrive supports your HR needs virtually or in person. Our team’s specialties include Mergers and Acquisitions, C-Suite executive coaching, employee relations, diversity, inclusion and belonging millennial consulting, performance management, employee engagement, talent acquisitions and digital HR transformation, and the ability to improve overall HR performance for your organization. For more information, visit www.thrivehrconsulting.com.