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The Rich Mosaic of PEO Profitability

A lot goes into PEO profitability. Zoom in, and you see the individual elements of your PEO’s financial and operational picture. Like the individual tiles, or tesserae, in a mosaic, they do not reveal much of a picture when viewed so closely. Zoom out, however, and a rich and detailed picture emerges.

Part of this zooming out is applying business intelligence to your PEO. This requires studying the various metrics and what they mean, developing baselines for improvement, and studying and analyzing areas that lead to the PEO’s success. Some of these areas are accessibility and response, productivity and profitability, client retention and growth, internal retention and growth, and product offerings. By aggregating the results of these analyses, you can create a scorecard to manage the big picture of your PEO’s profitability.

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How to Say It Best

In PEO Insider® this year, I’ve discussed powerful ways to explain what a PEO is and how we help clients. I’ve talked about the value proposition: “We solve problems in the areas of human resources, workers’ compensation, risk management, employee benefits, and payroll. Our goal is to help you increase profitability, maximize employee productivity, reduce time spent doing transactional human resources activities, reduce employment-related liability, and ultimately lower labor costs.”

Human Resources

HR Service Delivery as a Revenue Driver

HR services can look quite different from one PEO to another because there are varying components to what is classified under the HR hat. By creatively arranging and grouping HR services, they can be powerful sales tools to each prospective client. However, at many different stages or intervals of its business, a PEO is often forced to reassess the type, level, and extent of the HR services and support it will provide to its clients. Will support be provided onsite, by phone, or a combination of both?


Clarifying HRAs, FSAs, HSAs, and other Tax-Favored Health Arrangements under the PPACA

There are few rules of healthcare administration that are more challenging to navigate than those related to the various consumer-directed, tax-advantaged spending accounts. HRAs, HSAs, FSAs—just trying to keep track of all the various acronyms can be a chore. But then, of course, along came another acronym that completely changed the landscape of employer-sponsored healthcare and how these accounts will be administered: PPACA, aka the Patient Protection and Affordable Care Act, aka Obamacare.


Statehouse Update

State and Federal Resources and Benefits for Hiring Veterans Paul J. Richman

Every November 11, our nation observes Veterans Day. As President John F. Kennedy said in remarks delivered in 1961, “We celebrate this Veterans Day for a very few minutes, a few seconds of silence, and then this country’s life goes on. But I think it most appropriate that we recall on this occasion and on every other moment when we are faced with great responsibilities, the contribution and the sacrifice which so many men [and women] and their families have made in order to permit this country to now occupy its present position of responsibility and freedom….”

Special Report

2013: The Year in Review Kerry Carruthers

2013 felt like a breakthrough year for PEOs. From the industry-unifying “Keep Calm and Call a PEO” campaign to the increased focus on the role of PEOs in helping businesses comply with Obamacare, the year was marked by accomplishments and firsts. It was, as NAPEO President and CEO Pat Cleary said on more than one occasion, “our moment.”

Small Business Perspective

America’s Future Is Not in Government, It Is in Young Entrepreneurs Dan Danner

As of this writing, Washington, D.C., is in historic gridlock. You’re just trying to keep your doors open. Where is a business owner to look for inspiration? The answer is actually simple: Meet and talk to some young entrepreneurs through NFIB’s Young Entrepreneur Foundation (

PEO Spotlight

The Right Mix of Persistence, Service, and Technology Stephanie Oetjen

Persistence usually pays off in the PEO business, and it’s certainly paid off a couple of times for Layne Davlin, president and CEO of Einstein HR, based in Lawrenceville, Georgia. Persistence first brought him unexpectedly into the PEO business, and then earned him one of the most fun clients he’s ever had.

NAPEO Notebook

Making the Data-Based Case for PEOs Patrick J. Cleary

It is said that an economist, when presented with a great success story, will say, “Sure it works in practice, but will it work in theory?” With that in mind, we have set about making the data-based case for PEOs.

NAPEO Advisor

E-Verify William J. Schilling, Esq.

Q. How is E-Verify different from the Social Security Number (SSN) Verification Service? A. The SSN Verification Service (SSNVS) only verifies that a name matches the Social Security number.

The Inside Word

A Constant Amid Change Mark C. Perlberg

Healthcare reform has been top of mind for most PEOs for several years now. As we come closer to January 1, 2014 (the effective date for the new coverage under healthcare reform), I, as your chair, want to let you know about everything NAPEO is doing to support you—all of you—in this challenging arena.

Global Insights

Washington Must Rise to the Occasion Thomas J. Donohue

Many of our nation’s challenges are not being met, and many opportunities aren’t being seized, because our leaders are talking past one another. You’d think that the stakes of our ongoing budget and fiscal fights, for example, might inspire cooperation.

Employment Law

The Cost of Noncompliance David Cessante, Esq.

With federal and state agencies issuing new guidance and aggressively pursuing enforcement activities, it is as crucial as ever for PEOs and their clients to be compliant with the increasing number and complexity of employment laws.


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