ARKENSTONE DEFENSE: A MISSION-READY PEO

When it comes to hiring talent, processing payroll and managing benefits plans, most small and mid-size businesses face similar challenges. For companies working in the national security and defense space, these issues only scratch the surface.

A technology startup with a promising new platform may also need to navigate federal contracting rules, cybersecurity requirements, security clearances, DCAA timekeeping obligations, proposal development, classified training environments and an array of acronyms that can make even seasoned business leaders feel like outsiders.

These are the challenges Arkenstone Defense is built to handle.

Founded in April of 2025, the company’s mission is straightforward: remove friction between modern technology companies and the national security ecosystem. In practical terms, that means combining the traditional services and resources of a PEO with specialized capabilities designed for companies trying to enter, operate and scale within the defense industrial base.

Peter Dixon, William Treseder and Rachel Olney were inspired to start the company after experiencing firsthand how hard it is to do business with the federal government.

They had seen promising businesses struggle to make it through this complex process. Some had groundbreaking ideas and a desire to serve the country, but not the infrastructure, expertise or support required to navigate the defense market.

In other words, they faced exactly the kind of problem PEOs are built to solve—only in a far more specialized and security-sensitive context.

Arkenstone officially began PEO operations this July with Kerry Ashby at the helm of the PEO and serving as Arkenstone’s Chief Administrative Officer. An industry veteran, Ashby brings over 20 years of PEO operational experience to the team which has helped the company hit the ground running. the company hit the ground running.

The goal from the start was ambitious: build a 50-state PEO, launch with ESAC accreditation and offer a national master health insurance plan and other rich employee benefits.

Those are significant milestones for any PEO, but ones that are rarely—if ever—hit at the outset. The Arkenstone team was determined to hit them—and did. This certainly reflects the company culture that leadership has instilled.

“There are no egos here, and everyone takes extreme ownership and accountability,” Ashby says. “If someone sees a problem, they jump in to solve it.”

THE OPPORTUNITY

When many people think of defense contractors, they think of the biggest names in the industry. But the defense industrial base includes far more than large contractors. It also includes small and mid-size businesses, emerging technology companies and startups working on everything from autonomous systems to AI-enabled tools, cybersecurity solutions, navigation systems and other technologies that could have national security applications.

Ashby notes there are more than one million employees in the defense industrial base, with a substantial portion working for small to mid-size companies. Beyond that, there are many technology companies not yet counted in those numbers because they are still trying to break into the government market.

That is where Arkenstone sees enormous opportunity and need.

Technology has lowered the barrier to creating new products, especially as AI and software development tools accelerate the pace of innovation. A founder can move from idea to prototype faster than ever. But speed to product does not automatically translate into quick government adoption.

A company may have the technology. It may have the talent. It may even have a product the government needs. But the next steps can be daunting: identifying the right contract, understanding eligibility, drafting a proposal, achieving the right certifications, preparing for audits and building a workforce that can meet contract requirements.

Arkenstone’s model offers solutions to these unique workforce and compliance challenges in one place. Alongside core PEO services, the company offers or coordinates support for security clearances, DCAA-compliant timekeeping, labor burden and contract information, fringe management, cleared talent recruiting, classified-environment learning management and other defense-specific needs.

“Just as traditional PEOs simplify workforce management by consolidating HR, payroll, benefits, and employment compliance, we’re doing the same for government contractors by unifying the complex compliance requirements unique to the defense industry” Ashby explains.

This includes Supplier Performance Risk System (SPRS), Defense Federal Acquisition Regulation Supplement (DFARS), Defense Contract Audit Agency (DCAA) and other standards and frameworks that shape how companies manage data, contracts, timekeeping, audits and workforce processes.

The idea is to support companies from the earliest stages of market entry through the workforce challenges that come after a contract is awarded.

“It’s not uncommon for companies in the space to have a few founders or a small team, but when the company wins a contract it needs to hire rapidly—sometimes dozens of people within weeks,” Ashby explains.

And not just any people. They typically need security clearances, specialized training and onboarding processes that account for security requirements.

“If they don’t move quickly, they could lose the contract,” Ashby says.

That urgency makes the PEO value proposition clear. A company that needs to hire 50 people in two weeks cannot afford to build every HR, payroll, compliance, training and recruiting process from scratch. It needs infrastructure that can move at the speed of the opportunity.

A SECURITY FIRST MINDSET

For Arkenstone, security is not an add-on. It is foundational. The company adheres to rigorous, Pentagon-level data and cyber security protocols.

A component of this is Arkenstone’s commitment to only hiring U.S.-based employees. That applies not only to Arkenstone’s internal staff, but also to those with access to employee data on the company’s platforms. In a market shaped by national security risks, espionage concerns and sensitive information, that distinction matters.

The company has also held its partners to rigorous security standards. Arkenstone does not want clients to wonder whether its technology, partners or internal practices are secure enough for the environments in which they operate.

“Even where specific certifications are not required, we have committed to adhering to the highest level of security standards,” Ashby says.

The same philosophy applies to artificial intelligence.

AI is central to the technology trends shaping the defense market, and Arkenstone is leaning into AI internally and for clients. But Ashby is quick to distinguish between casual uses of AI and secure, mission-appropriate applications.

“AI has tremendous potential, but in our industry, it has to be deployed responsibly. Security and compliance can’t be an afterthought,” she says.

The challenge is to build AI agents and automation tools that can handle complex contract and compliance information securely. The company’s security and engineering teams work closely together to ensure what they build makes sense both from a delivery standpoint and a security standpoint.

That means following standards such as NIST SP 800-171.

“It’s the cybersecurity standard that specifies the security controls contractors must implement to protect Controlled Unclassified Information (CUI), like a SOC 2 for defense contractors,” Ashby explains.

In today’s world, cybersecurity can no longer be treated as a check-the-box exercise. It must be built into the way companies operate.

COMMITTED TO CLIENT SUCCESS

Success is not defined only by revenue, client count or sales targets. Arkenstone’s success is measured by whether clients are able to win contracts, grow and deliver on their obligations.

When a client succeeds, it may mean a technology company gets its innovation in front of the government. It may mean a small business is able to scale quickly enough to keep a contract. Most importantly, it means the men and women who defend our country have access to the technologies and capabilities they need, making our nation stronger and more secure through the innovation Arkenstone’s clients deliver.

For Ashby, working with businesses in the defense industry has been energizing.

“There’s some really cool stuff out there,” she laughs. “Sometimes I’ll look at a company’s website and think, I can’t believe I’m talking to these people.”

The entrepreneurs behind these companies are motivated, intelligent and passionate people, but they still need critical mission support to keep their businesses thriving.

“The challenge isn’t convincing companies they need it,” Ashby says. “It’s helping them understand what we’re building. Once they do, the value becomes immediately clear.”

Industry partners have also been enthusiastic and excited about engaging with Arkenstone and their clients. Government contracting can be intimidating. The requirements are specialized. The risks are higher. The compliance environment is dense. But Arkenstone has attracted partners who understand the importance of the mission and want to be part of the solution. Those relationships have been critical, from helping shape the company’s benefit offerings to securing the specialized insurance programs government contractors require. Partners like Marsh McLennan’s PEO and federal teams have brought expertise that goes well beyond traditional brokerage services.

That kind of partnership will be important as the company grows. Arkenstone plans to continue layering in new services, building new partnerships and listening carefully to customer feedback. In the early months, Ashby says the company is especially focused on identifying what clients still need and where additional integrations or services could reduce friction.

Her long-term goal is clear.

“I want Arkenstone to be the most trusted partner for companies operating in this space,” she says. “I want customers to see us as the first call when they’re facing complex workforce challenges—not only HR and payroll questions, but anything that impacts their people, operations, and ability to execute.”

Achieving that goal will require the same combination of specialization and accountability that has shaped the company from the beginning. The defense industrial base is evolving quickly, and the businesses driving its next generation of innovation cannot afford to be slowed by administrative complexity or unfamiliar government requirements. They need partners like Arkenstone that understand both the urgency of their work and the environment in which it must be performed.

Arkenstone may be a new entrant to the PEO industry, but its mission is rooted in a familiar promise: helping businesses overcome complexity, grow with confidence and take care of their people. In a market where readiness, trust and execution are essential, that promise could prove to be a mission-critical advantage.