PEO Solutions for Businesses in Iowa

Iowa, synonymous with farming to anyone outside the Hawkeye State, also has seen manufacturing become a major source of employment. Manufacturing jobs account for 14.5 percent of all covered private and public employment, followed by health care and social assistance (14.2%) and retail trade (11.4%), according to Iowa Workforce Development.¹

In 2022, Iowa saw an increase in the establishment of farms for the first time since 2007, reversing a long-term trend of decline. The 1% increase was reported by the U.S. Census of Agriculture. Still, as of 2023, only 1.3% of all employees in Iowa work on farms, and many of these farms are considered small businesses that the Census of Agriculture says does not fit the usual definition of a “family farm.”¹

Most of Iowa’s employers – 99.3% – are considered small businesses, with a little more than 282,000 registered entities employing almost 617,000 employees or 45.6% of all employees in the state.²

Iowa is considered a business-friendly state when it comes to its regulatory environment, including having one of the lowest premium tax rates in the nation at 1%. This has given a boost to the Finance and Insurance sector, which makes up 6.1% of all employment in the state,³ and has provided an annual average wage nearly 67% higher than the statewide average, according to the Iowa Economic Development department.

Even in a pro-business environment, there remain regulations and legislation at the state and federal level that bring compliance obligations. Paychex conducted a survey that found 34% of business leaders said on a weekly basis their companies spend more than 10 hours on HR tasks, which come with an annual average cost of $172,000 for small businesses and an average of $414,000 for large businesses.⁴

Businesses in Iowa faced with the potential for these financial and time constraints should check out how a Professional Employer Organization (PEO) might help.

Why Work With a PEO in Iowa?

A PEO can support and facilitate many HR administrative tasks such as payroll processing, helping maintain compliance, improving workplace safety, and administering benefits, to name a few. In a PEO relationship, employers don’t lose control of their company because the client maintains the responsibilities of managing operations and employees. For businesses with an HR staff and even those employers without a specific HR department, a PEO can add value by helping support those handling HR duties at a business.

One challenge facing employers of any size is recruitment and retention, tasks that can prove to be prohibitive in terms of time and cost. Consider that the average cost of turnover is almost $9,400 per employee, according to a Paychex survey, so keeping good employees is critical for a business.⁴ Working with a PEO might help, especially with retaining talent. The National Association of Professional Employer Organizations (NAPEO) conducted a survey that shows that businesses working with a PEO have 12% less turnover than those without a PEO.⁵

How Can Paychex Help Provide Efficiencies and Insights to Businesses?

With an all-in-one HR technology platform, Paychex PEO* helps businesses make HR administration more efficient and helps enhance productivity.

• HR administration: Dedicated HR support assists with recruitment and retention, onboarding, training, handbooks, and more that can help with overall employee communications.
• Payroll administration: With payroll processed, taxes calculated and then remitted by deadline, employers gain peace of mind about their compliance requirements. Paychex PEO also helps to reduce issues of the administration associated with state unemployment insurance.
• Compliance: Our HR Professionals are supported by a team of compliance analysts to help you proactively identify potential risks and offer actionable HR advice.
• Employee benefits: Providing access to Fortune 500-level benefits helps businesses stay competitive in the search for top talent. Your employees gain retirement plan and health insurance options, while you save time and money because Paychex PEO vets the benefit packages directly with carriers.
• HR technology: Employees and employers can save time with self-service that simplifies tasks such as updating information on payroll, benefits, and personal data.
• Risk management: With a dedicated safety specialist from Paychex PEO, your business will be provided training to help keep the workplace and your employees safe.

Paychex PEO provides additional advantages, including the potential to boost employee and business productivity, facilitate growth, and leave employers with peace of mind.