In normal times, professional employer organizations (PEOs) like Axcet help small businesses attract, motivate and retain employees, reduce HR-related expenditures and liabilities and give owners more time to focus on core business.
PrismHR, a PEO software solutions provider, researched how PEOs helped their small and medium-sized clients through the early, unprecedented stages of the pandemic and the accompanying business shutdown that stretched over several months. The study showed that 69% of PEOs assisted clients with navigating the Coronavirus Aid, Relief, and Economic Security (CARES) Act and 54% of PEOs provided clients with support in seeking Families First Coronavirus Response Act (FFCRA) funding.
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PEOs’ involvement paid off for their small business clients. New research by the National Association of PEOs and HR analytics firm McBassi & Company evaluated how PEO clients fared in the first months of the coronavirus pandemic. The research compared recent PEO client statistics with national data, including:
PPP Loans
PEO clients were more than twice as likely to receive PPP loans, at a rate of 65.9% vs. 30.1% for small businesses as a whole. Further, 49.7% of PEO clients received Round 1 PPP funding, compared to 28.9% for all small businesses.
PEO clients were extraordinarily likely to be approved for PPP funding: 98% of their applications were successful. Notably, these small businesses typically received significant help from PEOs in the PPP process.
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Business Closures
PEO clients also were far less likely than other small businesses to remain temporarily or permanently closed as the economy began reopening. By July 2020, only 1.3% of PEO clients remained temporarily closed, as compared to 14% of all small businesses.
And, they closed permanently at less than half the national rate. Just .06% of them had shut down for good by July 2020, while 1.5% of small businesses overall had permanently closed their doors by that time.
Final Results
So, from a percentage standpoint, compared to other small businesses, PEO clients are:
While the first wave of urgent needs from small and mid-sized businesses is behind us, smaller businesses will continue to face challenges as the recession and COVID-19’s impact continue. As the research shows, PEOs will provide unmatched support as these smaller companies anticipate and respond to the new normal.
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Written by
Jerry Diddle is the Founder and President of Axcet HR Solutions and a pioneer in the Professional Employer Organization (PEO) industry. Since launching Axcet in 1988, Jerry has been dedicated to helping small and mid-sized businesses simplify HR, reduce risk, and focus on growth through a comprehensive, high-touch service model.
At a time when the PEO concept was still emerging, Jerry recognized its potential to transform how businesses manage their people. He built Axcet on a relationship-driven approach—one that emphasizes responsiveness, personalized support, and long-term client partnerships. That philosophy continues to shape the company today, guiding its commitment to delivering practical HR solutions with a human touch.
Jerry's leadership has helped establish Axcet as a trusted partner for businesses across Kansas and Missouri, offering expertise in human resources, payroll administration, employee benefits, workers' compensation, and workplace safety. His focus on service excellence and continuous improvement has played a key role in building a strong, experienced team dedicated to supporting clients at every stage of growth.
Originally from Washington, D.C., Jerry is a graduate of the University of Maryland and brought his entrepreneurial experience to Kansas City, where he saw an opportunity to introduce a better way for businesses to manage HR. Through his writing, Jerry shares insights on the evolving role of PEOs in supporting today's employers.
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