The way small and mid-size businesses manage their people is changing. Employee expectations and the changing landscape of work have created new challenges. Business leaders recognize the importance of HR as a strategic driver of growth, but struggle with bandwidth or resources to fully implement what they know is important. As a result, more businesses are turning to Professional Employer Organizations to manage the complexity of today’s workplace.
What Business Leaders Should Know Heading into 2026
Research shows that more than 230,000 U.S. companies now partner with a PEO. That represents about 15 percent of all employers with 10 to 499 employees. And that number is expected to grow in the years ahead as companies search for better ways to support their people and strengthen operations.
This growth is fueled by measurable business benefits. PEO clients experience double the annual median revenue growth, a 16% increase in profitability, and 12% lower employee turnover compared to non-PEO firms.
At LBMC Employment Partners, we’ve helped organizations across many industries take advantage of those benefits. We are also the only Tennessee-based PEO to earn the Certified Professional Employer Organization (CPEO) designation. It reflects our commitment to quality and the high-touch support we provide every day.
As 2026 approaches, we’re having more conversations with leaders who want to understand how a PEO can prepare them for new challenges. Below, we break down the most important ways a PEO can create stability, reduce risk, and support healthy growth in the year ahead.
How PEOs Set Businesses Up for Success in 2026
In many ways, a PEO partnership can help companies solve today’s challenges while also preparing for the future. Here are a few specific ways LBMC EP enables you to build a scalable, resilient organization:
1. Offer Competitive Employee Benefits in a Changing Market
Employees place tremendous value on their benefits, but rising premiums and shifting healthcare regulations are making it harder for employers to keep up. Many small and mid-size businesses are feeling squeezed. They want to offer excellent benefits, but they don’t always have the buying power to compete with larger employers.
A PEO can level the playing field. Through LBMC EP, clients gain access to competitive, large-group benefits that rival what national companies provide. This includes medical, dental, vision, disability, and other coverage options employees expect today. Our team also monitors regulatory shifts and plans for upcoming changes so you never feel caught off guard.
It’s one of the most effective ways to attract top talent and support your current team in a tight labor market.
2. Reduce the Burden of Payroll and Tax Compliance
The compliance landscape will continue to change in 2026. New state laws, federal updates, and shifting payroll requirements are creating extra pressure for already busy teams. Many companies are moving from simple payroll outsourcing to a full PEO model because they need more than a vendor—they need guidance.
With LBMC EP, you gain access to experienced HR and payroll professionals who stay on top of the latest changes. We handle payroll administration, tax filings, reporting, and compliance reviews. Our team walks beside you to make sure your policies and processes meet current requirements and are ready for future updates.
It’s a partnership designed to reduce risk and save time while giving you the peace of mind that nothing is slipping through the cracks.
3. Free Up Time to Focus on Growth, Not HR Tasks
Growing organizations often reach a point where HR responsibilities start to pull leaders away from strategy. Hiring, onboarding, performance management, benefits questions, and compliance issues all take valuable time. As the business expands, those needs multiply.
A PEO removes that pressure. Instead of juggling multiple systems and vendors, LBMC EP brings everything together under one partner. Each client is paired with a dedicated human resource business professional who learns about your industry, understands your specific challenges, and offers proactive support.
This model gives leaders more capacity to focus on sales, service, and long-term planning. It also strengthens internal operations by ensuring HR is handled consistently and efficiently.
4. Improve Employee Retention and Engagement
Employees are looking for more support, stronger communication, and meaningful development opportunities as workplace expectations continue to evolve. These needs will only intensify in 2026, especially as hybrid work continues and competition for talent remains high.
A PEO can create a stronger employee experience. At LBMC EP, we offer tools for employee listening and feedback, compensation benchmarking, management coaching, and performance development. Our resources equip you to understand what employees need and respond in ways that build trust.
It’s a practical way to increase engagement and reduce turnover while creating a culture where people feel supported.
5. Make It Easier to Grow and Scale Confidently
Scaling a business brings new HR challenges. Hiring employees in new states introduces multi-state tax and labor requirements. Expanding services or opening new locations increases administrative complexity. Even small changes can create unexpected compliance risks.
LBMC EP helps businesses navigate these situations with confidence. We support clients as they plan their growth strategy, evaluate workforce needs, and address HR roadblocks. Our team also manages the complex work behind multi-state onboarding, payroll, tax registration, and compliance.
This lets organizations grow faster and with fewer obstacles.
What Other Businesses Are Saying
Businesses across various industries rely on LBMC EP to set the stage for their success. Here are a few of the ways our PEO solutions have made a tangible difference for business leaders:
- Decode Health: Since 2015, Decode Health has partnered with LBMC Employment Partners in a comprehensive PEO relationship to navigate the HR and administrative complexities of scaling a business. CEO Chase Spurlock shared, “You still get the human touch, but with systems that reduce the administrative burden. That’s a rare combination.”
- Green Apple Strategy: This Nashville-based marketing agency leveraged its PEO partnership to expand its business across state lines and grow its talent and client outreach. This flexibility allows Green Apple to grow their team in almost any state without facing the steep costs associated with small business expansion.
- Refuge Counseling Center: The Refuge Center partnered with LBMC Employment Partners in 2021 to streamline HR functions through our PEO model. Operations Manager Megan Owens shared, “As a nonprofit, we have to be good stewards of the resources entrusted to us, and LBMC EP has helped us do just that.”
Build Confidence in Your HR Approach for the New Year (and Beyond)
Setting your business up for success in 2026 means making strategic choices now. A PEO is the proactive solution that provides the stability, benefits, and administrative relief necessary to thrive in a complex environment.
Explore these additional resources to learn more:
- Why CFOs Are Rethinking HR Spend and Choosing PEOs
- 5 Advantages of Using an All-in-One HR Provider
- PEO vs. HRO – How to Choose the Right Solution for Your Business
If you’re ready for more personalized guidance, reach out to our team at any time. We’re happy to answer questions to help you determine whether a PEO is the right fit for your organization.
