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Letter from the NAPEO President

‘MY, HOW YOU’VE GROWN’

That’s what grandparents say when they see their grandkids after being away for a while. As parents, we don’t notice it because our kids grow one pound, one inch at a time, so imperceptibly each hour, each day, each week, and each month. It takes the perspective of one who’s been away to bring that growth into full relief. 

So it was a few weeks ago, talking to a friend who had been in this industry, then out, and now back in. We were talking about the growth of the industry. Again, I don’t notice it because I live in it and see it every day, but I was telling him the numbers: When I arrived at NAPEO nine years ago, the combined 941s of our member companies was $60 billion. Last year—a pandemic year, 2020—the combined 941s of our member companies was $160 billion. Even I can do that math: +$100 billion. 

Along with that growth in companies has been an explosion in engagement—again, helped along by the pandemic. Since March of last year, when the world changed, almost 2,500 people have added member accounts here at NAPEO, bringing the grand total of our database of contacts now to 6,500. That’s about a 40 percent increase in the past year alone.  I can tell you that those contacts regularly reach out to us. Good for them—they should, it’s why they pay dues, and it’s why we’re here. You’ve all heard me say over and over again that I am blessed with a great team here who is steeped in member service. From meetings to government affairs to communications to legal, this team is responsive, professional, and generally good to work with. That last part is important to me. 

As my friend and I chatted and caught up, we both were marveling at the growth in the industry and in the demand. “Wow,” he said, “How many people are you up to now at NAPEO?” 

I had to pause for a minute as the question sunk in. “Eighteen,” I answered, “No change.” I’m not sure who was more impacted by the answer, him or me, but I can tell you it was a moment of reflection for me. One company at a time, one database contact at a time, one dollar at a time. 

My, how we’ve grown. 

Of course, growth is a double-edged sword. I have always believed that growth fuels growth, i.e., the bigger we get, the more prominent PEOs will be, growing awareness and powering more growth. But the down side to growth is that because we’re bigger, our profile increases and we tend to bump into more people, organizations, and interest groups. We are seeing that on both the federal and state levels. In years past, our state action plan was limited to a shorter list of states. Today, that list just grows. On the federal level, we’ve achieved some great victories, but we also attract attention. That’s fine, it’s part of the maturity of a growing industry, and we welcome it, but we are meeting it with the same 18 people who advocated for and defended a much smaller industry. That needs to change. I worry about my team’s health and bandwidth. The culture here is not to just let things go. They don’t have it in them. 

About 10 years ago—before I arrived—some brave folks, including Brent Tilson and John Allen, tackled the thorny issue of dues. They hatched a schedule that has at its top end companies with 941s in excess of $1 billion. At the time, I’m sure that seemed like “a gazillion,” a stretch goal. Today, we have 15 members over that mark, with another half dozen who will exceed it in the next year or two. Last month, the NAPEO Board of Directors approved an adjustment to the decade-old dues rate card to more adequately reflect today’s industry and membership. Applying it to our current membership, it will bring in an additional $400,000 in revenue—about 5 percent of our current budget. Most companies will not notice much of a difference. Assuming we bring in extra money, our commitment to you is that we will spend every cent of that money furthering our mission: to grow, promote, and support the PEO industry. It will take effect in the 2022 dues year. 

You’ll be hearing more about this in the months to come, but I wanted to provide some context. We want an association that is strong and is well-positioned for an industry that is poised for even greater growth. 

 

PAT CLEARY
President & CEO
NAPEOAlexandria, Virginia

 

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