Economy of Scale How Employer Advantage businesses with Health and Benefits of a large corporation 1024x515 1

How Employer Advantage provides businesses with Health, Benefits, and Employee Administration and Compliance Services they could never afford on their own.

By Lee Allphin, Employer Advantage Founder and Chairman of the Board

Many years ago, I had the privilege of spending a few minutes with Sam Walton, the founder of Wal-Mart. As we chatted about business strategy, he confirmed that Wal-Mart’s “everyday low prices” are possible due to the company’s huge size and subsequent buying power. When a business reaches a certain size, as Wal-Mart did long ago, the increased efficiency of mass production results in bigger savings. Simply put, the more you buy, the lower the cost. The larger you are, the greater advantages you have. This is known as Economy of Scale.

Further, Mr. Walton told me of Wal-Mart’s application of “Managerial Economy of Scale” which occurs when a large firm can afford to hire specialists and utilize them efficiently. With the broad scope of work required in today’s economy, specialization of labor is often necessary. But a small, single-location retail store would find it too expensive to permanently retain an in-house specialist, particularly when that expertise was not needed 100% of the time.

How We Provide Our Clients with Economy of Scale

While a single small to mid-size business lacks the independent buying power of an industry titan like Wal-Mart, one can attain the same benefits of service and savings through Employer Advantage.

Health and Benefits Economy of Scale

As an IRS Certified Professional Employer Organization (CPEO) Employer Advantage combines the purchasing power of the more than 400 companies, and their cumulative employee counts, that we service. This allows us to capture significant savings on essential health and benefits programs for our clients: Group Health Insurance, Dental, Retirement, Life Insurance, and more… We make smaller companies “large” with our ability to combine and manage their employee administration and compliance needs.

Managerial Economy of Scale
Similarly, Employer Advantage helps clients achieve Managerial Economy of Scale by providing a reliable stable of service specialists without the cost of hiring new employees. Our suite of services includes management of Human Resources, Payroll, Health and Benefits, Retirement, Safety, Compliance, Employment Taxes, Employee Manuals and Training, Workers’ Compensation, Unemployment Claims, Liability Insurance, OSHA, DOT, and more…

The employment side of a business involves a wide scope of compliance specialization. As with the Wal-Mart example, it would be nearly impossible for a single small or even mid-size business to afford to hire the many specialists required to efficiently assist with these issues in-house.

Businesses using Employer Advantage are essentially acquiring their own Payroll Department, Health and Benefits Manager, Human Resources Professional, Risk Manager (Workers’ Compensation and Unemployment Claims) and Safety Engineer.

Even if a small to mid-size business could afford to hire a single specialist, that may not be the appropriate solution. Often smaller businesses don’t need a specialist on hand 100% of the time. By  using Employer Advantage, companies assure that when the moment arises, that expertise will be at their command.

Sam Walton’s opinion confirmed the Employer Advantage concept that being large enough to provide specialists to smaller businesses on a per-case basis was badly needed. He quoted JC Penney, with whom he had once worked: “I would rather have 1% of 100 specialists working for me than 100% of one.”

The Bottom Line

For small and mid-size business owners, economy of scale provides huge advantages that may not otherwise be available to them. As an Employer Advantage client, businesses can experience the buying power, benefits, and specialty assistance of a much larger corporation for a fraction of the cost of attempting to attain these things independently. When economies of scale are satisfied, business needs can be met as well.

Want to learn how your business can benefit from Employer Advantage’s ability to bring you Economy of Scale?


We don’t just give quotes—We provide strategic business proposals.


  • Free strategic assessment of your business needs
  • Quick and easy account setup and seamless transitions
  • Urgent Requests | Please Call: Toll Free 800.467.3909

About Employer Advantage

A New Path to HR Bliss — Trusted for more than 25 years, Employer Advantage frees business leaders from the administrative and compliance burdens of having employees so they can focus on what they do best: helping their business succeed. From energetic entrepreneurs to large corporations, we create a tailored and strategic approach to fit individual business needs and company culture.

Our suite of services includes Human Resources, Payroll, Health and Benefits, Safety, Compliance, Employment Taxes, Retirement, Employee Manuals and Training, Workers’ Compensation, Unemployment Claims, OSHA, DOT, and more…

More than a slick software solution — Employer Advantage’s dedicated service teams save businesses time and money and enhance profitability, while providing employees with top-notch assistance and benefits.

Headquartered in the Midwest and freeing more than 400 companies throughout the country, Employer Advantage is the trusted IRS-Certified Professional Employer Organization (PEO). We offer free consultations and strategic assessment of business needs, with quick-and-easy account setup and seamless transitions. 417-782-3909 | Toll-Free 800-467-3909 | | Learn More: