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Don’t bother starting a business if you expect it to be easy. A successful business requires time, talent, and tenacity. We’ve all heard the depressing statistics of business failure. According to the U.S. Bureau of Labor Statistics, approximately 80% of businesses will survive their first year, 70% their second year, and 50% their sixth year. After 10 years, about two-thirds of all businesses will have closed up shop.

So, what’s keeping business back? Why are the odds seemingly stacked against the business owner?

There have been a variety of surveys and studies on the main challenges small and mid-sized businesses face. According to multiple recent surveys conducted by National Association of Professional Employer Organizations (NAPEO), the five common business challenges are:

  1. Hiring new employees
  2. Health care
  3. Taxes and regulations
  4. Attracting new clients
  5. Economy/growing the business

Fortunately, the top concerns of business owners are the same types of issues that Professional Employer Organizations focus on. A good PEO will work with you to relieve responsibility, facilitate new hires, handle health care administration, and help navigate complex compliance and claims issues. This frees up business owners to focus on their strengths, like attracting new clients and growing their business.

Research commissioned by NAPEO shows that small and mid-sized businesses who partner with a PEO experience higher growth rates, lower employee turnover, and higher rates of business survival. Learn more about the benefits of outsourcing HR functions to a PEO.

Top 5 Business Challenges and How a PEO Can Help

Learn how a PEO like Resourcing Edge can help you navigate the five most common business challenges.

1. Hiring New Employees

Hiring the right people is essential to the success and growth of your business, but it’s also time-consuming and fraught with risk. By partnering with a PEO, you gain the competitive advantage with recruiting, hiring, and onboarding.

PEOs like Resourcing Edge can provide many services to help with hiring, including: 


 PEOs can save you a lot of time and money by making your recruiting process more efficient. They can also leverage their professional network to help find quality candidates for open positions.

When it comes to salary negotiations, a PEO will be able to provide important first-hand knowledge for salary discussions, such as payroll, benefits, budget, and position requirements.

Learn more about how to recruit and hire top talent for your company growth strategy.


 There are many laws and regulations regarding hiring that you may not be aware of. A PEO helps ensure compliance by making sure all recruiting, offerings, interview processes, onboarding procedures, and other hiring activities meet local and federal guidelines.

Employee Onboarding and Experience

With a PEO, you can remain confident that all paperwork, training, handbooks, and procedures are handled quickly and professionally. Employees will have a positive onboarding experience when there is clear communication and streamlined administrative tasks.

Many PEOs offer some kind of HR Software-as-a-Service (SaaS). Resourcing Edge provides each employee with their own re360 account, giving them 24/7 access to an array of helpful tools and resources, such a payroll and benefits information. This will improve employee satisfaction and retention.

PEO can also help with additional employee-related services, such as workers’ compensation, benefits administration, and criminal background checks.

2. Health Care

PEOs give small and mid-sized business access to big-business benefits, such as:

  • Health Insurance
  • Dental and Vision Care
  • Life Insurance
  • Retirement Savings Plans
  • Job Counseling
  • Adoption Assistance
  • Educational Benefits
  • PTO Policy Management
  • Pet Insurance
  • Supplemental Voluntary Benefits
  • Employee Assistance Programs

When employees have health insurance, retirement options, and other perks and benefits, they feel respected and cared for. A PEO provides small and mid-sized businesses Fortune 500-level benefits they probably couldn’t get on their own. Learn about the most desirable employee benefits and when to start offering them.

3. Taxes and Regulation

HR professionals aid with federal, state, and local employment laws and help employees understand their rights and responsibilities under the requirements.

Here’s a quick list of some of the laws you’ll need to navigate as a growing business:

  • Fair Labor Standards Act (FLSA)
  • Immigration Reform & Control Act (IRCA)
  • Employment Retirement Income Security Act (ERISA)
  • Equal Pay Act (EPA)
  • National Labor Relations Act (NLRA)
  • Consumer Credit Protection Act (CCPA)
  • Occupational Safety and Health Act (OSHA)
  • American with Disabilities Act (ADA)
  • Affordable Care Act (ACA)
  • Family and Medical Leave Act (FMLA)
  • Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA)

If all these laws relating to harassment, discrimination, wage, immigration, benefits, and filing are making your head spin, you’ll be glad to know that a PEO can guide you through all of your compliance requirements at every size.

4. Attracting New Clients

The best way a PEO can help businesses attract new clients is by taking over key HR responsibilities, monitoring and managing risk, and providing additional services and hands-on expertise.

With a team of specialized HR experts, you always have a trusted team of advisors to guide you through employee and people-related issues. This gives you a big advantage over competitors who don’t have the power of a PEO on their side.

Many PEOs, such as Resourcing Edge, are also experts in merger and acquisition strategy.

5. The Economy and Business Growth

While the state of the economy is mostly out of our control, PEOs can help you cope with new laws and regulations, technological changes, and market fluctuations.

Research by NAPEO finds that working with a PEO generates many advantages for businesses and their employees.

  • Annual median revenue growth for PEO users was twice that of comparable non-PEO firms.
  • PEO users are significantly less concerned than non-PEO users about their ability to handle key business challenges:
  • Hiring employees (45% of PEO clients reported this was a “moderate” or “major” concern, versus 70% of non-PEO firms).
  • Increasing revenues (73% of PEO clients reported this was a “moderate” or “major” concern, versus 90% of non-PEO firms).
  • Raising capital/funding (18% of PEO clients reported this was a “moderate” or “major” concern, versus 45% of non-PEO firms).

It can be hard to predict changes in the economy, but a PEO can help safeguard your company against common pitfalls by making sure you are compliant and your data is protected.

How to Survive Biggest Business Challenges with a PEO

When you partner with a PEO, you enter a “co-employment” relationship. This makes the PEO a co-employer of your employees, which allocates administrative and employee-related responsibilities to the PEO while leaving the day-to-day business decisions and operations to the client company.

PEO clients don’t have to worry about payroll, benefits, workers’ compensation, or other administrative responsibilities, automatically eliminating many of the barriers to business success.

According to NAPEO:

  • Businesses that use a PEO are approximately 50% less likely to fail from one year to the next.
  • The business failure rate among companies that used a PEO for at least four quarters ranges between 1% and 4% per year.

When you partner with a PEO like Resourcing Edge, you gain access to a full team of HR professionals, specializing in everything from payroll and benefits, to compliance and risk management. PEOs give you access to a team of HR and legal experts at a fraction of the cost since you are sharing these professionals with other companies.

Gain the competitive edge with Resourcing Edge. Contact us today for more information on how we can help your business succeed.

Shellie Rich

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