Topic Outsourcing HR / PEO,

Why Millennial-Run Companies Are Turning to HR Outsourcing Partners

Why Millennial-Run Companies Are Turning to HR Outsourcing Partners

The millennial generation is on track to be the most diverse generation of professional adults in history. We are quickly approaching the time when millennials (people born between 1980 and 1996) will comprise the majority of the workforce. According to, 62% of millennials have considered starting their own business and 83% of workers have seen millennials in their office managing employees from older generations. Millennials are also looking to take professional leadership responsibilities earlier than both baby boomers (born between 1946 and 1964) and individuals from generation X (born between 1965 - 1980). The way business is done is changing and the millennial generation is at the forefront. 

The New Type of Business

As millennials take top positions in businesses of all sizes, they provide a glimpse into how they will lead industries into the future. More so than previous generations, millennials care about the needs and the well-being of their coworkers. They understand the pressures and challenges that young talent face because they faced similar challenges in their own careers. Millennial business leaders also know how important it is to retain young talent and how an inclusive and fun workplace improves the quality of life for every employee. 

The millennial way of doing business is to find creative methods to engage employees while encouraging productivity and loyalty. In practice this can take many different forms that include: 

  • Allowing all employees to participate in the company's vision and strategy development
  • Celebrating milestones
  • Providing distinctive and comprehensive benefits (such as health insurance, discount programs, and pet insurance)
  • Putting more trust in their employees

Each manager or CEO must find the best ways to motivate their specific team, and they ignore this responsibility at their peril. Motivation feeds the souls of employees, who without motivation rarely go the extra mile to meet a company goal. Additionally, empathetic employees  - when needs are not being met within the organization - are much more likely to leave their current job for a position in another company. 

How Can Millennial Leaders Meet these Changing Needs

The millennial approach to business is admirable, and it is also ambitious. Building a workplace that engages employees can be difficult, especially when there are so many other things that companies must do to build their business. 


Benefits present a particularly interesting challenge for leaders to overcome. Most employees believe that a robust set of  benefits are essential. They want a workplace that provides:

  • Health insurance
  • Paid time off
  • Awards and recognition
  • Bonuses
  • Meal breaks

While you can provide some of these benefits with little incremental cost, many businesses struggle to find a way to foot the expensive bills for must-have items like medical insurance.  Medical insurance can be cost-prohibitive, and it is very difficult to pay for a reasonable share of these costs. Fortunately, there is a practical way to clear this hurdle. 

HR Outsourcing through Co-Employment

Co-employment is an arrangement by one business to delegate some HR tasks and responsibilities to an HR outsourcing partner, known as a professional employer organization (PEO). Unlike joint employment, a co-employment agreement leaves all control in the hands of the business owner. This type of agreement provides two main benefits in principle and many more in practice. 

Health Insurance 

PEOs negotiate with insurance companies on your company's behalf to provide benefits plans and benefits administration for your employees. PEOs provide this same service for other companies as well, and this allows them to bring thousands of employees to the negotiating table. This results in lower insurance costs for your employees, as well as a happier and healthier workplace. 

Increased Employee Satisfaction

More so than other generations, many millennials do not feel fulfilled in their positions if a large portion of the work day is dominated by busy work. They yearn to use their creativity and talent to innovate, rather than to file papers, fill out forms, or input data. Outsourcing some of your company's HR responsibilities can free your HR employees to work on projects that benefit both the company and satisfy them intellectually. 


Millennials have grown up in a world in which technology has progressed at lightning speed. Theirs is a generation that expects a high degree of sophistication, efficiency, and automation. A quality HR outsourcing partner can provide your employees with an efficient, self-service technology stack that is mobile friendly. An intuitive HR cloud can: 

  • Streamline payroll processing
  • Analyze data and generate reports
  • Manage demographics and tax information

This technology will not only benefit your employees, but it will also give your business the opportunity to handle the challenges that growing companies face. 

What Does the Data Say?

Available data shows that when your HR outsourcing partner is a Professional Employer Organization (PEO), your business gains more than would otherwise be possible. The National Association of Professional Employer Organizations released a study that states:

  • Companies that partner with PEOs have higher growth rates than those that don't 
  • PEOs save approximately 35% on HR costs
  • Enables small business employees to access health benefits at a lower cost than would otherwise be possible.

What do Millennials Say?

Millennials, as a group, are more likely than older generations to embrace new ideas that have the potential for big rewards. They also expect employers to take care of their employees. For these reasons and many more, millennials are more likely to embrace an HR outsourcing partner as a way to reduce costs and free talent to focus on the business rather than on administrative tasks. 

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Jason Randall

Jason Randall

Jason L. Randall is the CEO of The Questco Companies. He regularly speaks on topics related to strategy, growth, and organizational performance.