Alexandria, Va. (November 17, 2004) — Workers in small businesses across America can have access to good healthcare coverage if their companies have professional employer organizations (PEOs) on their side. Many PEOs offer comprehensive health benefits to meet or beat those of well-known Fortune 500 companies, according to a Fall 2004 survey by the National Association of Professional Employer Organizations (NAPEO).

NAPEO surveyed a random sampling of its PEO members of all sizes and compared their benefits to those of five typical Fortune 500 companies. Nearly all the PEOs surveyed offer health plans; they also offer eye-care and dental coverage, which several of the Fortune 500 companies do not provide.

"We heard PEOs could provide Fortune 500 benefits to small companies, so we selected one," said Addie Cinquino, vice president of operations for Engineered Assemblies Corporation (EAC), a manufacturing company working with COMPSolutions PEO (Oakland, N.J.). "When employees and job applicants compare us with other companies our size that do not have a PEO, we have so much more to offer."

U.S. workers value quality benefits more than compensation, according to a recent research by the Society for Human Resource Management's foundation. "Benefits" are second only to "job security" on the list of job satisfaction factors.

"Small businesses want to add or upgrade their benefits to compete effectively for the best talent and retain good workers," said Milan Yager, executive vice president of NAPEO. "They are learning that PEOs can provide great benefits efficiently and cost effectively. An estimated 40 percent of business clients entering a PEO arrangement significantly upgrade their total employee benefit packages."

That was true for Lori Corey, administrative director for Oxygen One, who selected The Employer Group (Madison, Wis.) as her PEO. "Our PEO gives us the opportunity to offer our employees a package of benefits we couldn't come close to offering on our own," she said. She also appreciates their staff's accessibility and helpfulness. "They're always there when I have questions about payroll or need to review a benefit or personnel issue." As a Board member for the Wisconsin Association of Medical Equipment Services (WAMES), she has recommended working with a PEO to other WAMES members.

Workers appreciate the good benefits when their companies have a PEO relationship. "As an employee of a two-person service company, the entirety of my benefit package would probably be the paycheck that arrives every Friday," said Ron Jenkins, who works for his brother's firm, the Dennis Jenkins Company, and enjoys the benefits offered by their PEO, Emplicity (Irvine, Calif.). "Through our PEO's purchasing power and economies of scale, I now get more choices on benefit and retirement plans than I would if I worked for a Fortune 500 company."

For the small business owner, negotiating a benefits package is a headache that a PEO can relieve. "Health benefits are very important for our business. We used to have to find, compare and make our own decisions about health insurance for the company," said Gurbir Kohli, comptroller for Satnam Gifts (d/b/a/ aaahs!). "We knew what our employees wanted, and our PEO, Shaw & Shaw, provided that." The PEO relationship has allowed him to concentrate on the business rather than spend time shopping for insurance. "Our PEO saves us time and complications," he said. Shaw & Shaw is located in Orange, Calif.

Small businesses need superior benefit packages to compete with large companies for highly skilled workers. There is a strong demand for pharmacy technicians, according to Chuck Wall, founder of Advanced Cardiac Solutions Inc. His firm specializes in long-term intravenous treatments and uses Better Business Solutions (Birmingham, Ala.). "We have been able to compete against large hospitals when recruiting pharmacy techs," he said. "Our PEO provides a competitive benefit package and tells me how to gauge the rest of the industry so I can compare my benefits with the larger companies."

Given their value to their clients, it's no wonder the PEO industry maintains a nearly 90 percent retention ratio. "PEOs are one of the best competitive strategies," said John Hovey, president of the PEO Merit Resources (Des Moines, Iowa) and a member of the NAPEO Board. "With a PEO, a small company gains competitive strength and time to focus on the core purpose of the business, and the workers are happier and more productive. That's a powerhouse combination."

To learn more about PEOs, visit the NAPEO Web site: www.napeo.org.

NAPEO, the National Association of Professional Employer Organizations, is the recognized "Voice of the PEO Industry^®." NAPEO has 347 PEO members with employees in all 50 states and total revenues representing more than 70 percent of the industry's revenues. Professional employer organizations enable clients to cost-effectively outsource the management of human resources, employee benefits, payroll and workers' compensation. PEO clients focus on their core competencies to maintain and grow their bottom line.