A new survey by the National Association of Professional Employer Organizations (NAPEO) shows that the PEO industry continued to grow in the third quarter of 2019. PEOs provide HR services to small and mid-sized businesses. Industry executives also expect that that pattern will continue over the next year, with 85% reporting a likely increase in the number of worksite employees.
The quarterly survey, conducted in October 2019 by Industry Insights, also showed that PEO revenues and gross profits increased in the third quarter of 2019, compared to the third quarter of 2018.
“These results show that the PEO industry is sustaining its pattern of growth,” said NAPEO President & CEO Pat Cleary. “Surveys and studies consistently show that using a PEO is good for a business and its employees. PEOs provide a real benefit to businesses by providing HR services and solutions that they would otherwise be unable to afford.”
A total of 40 PEO executives responded to the survey. The typical responding PEO has 23 worksite employees per client. Survey respondents indicated the following:
Complete PEO Pulse Survey results.
- 3rd quarter revenue increased somewhat when compared to 3rd quarter 2018
- The annual wage per worksite employee stayed about the same over prior year
- The average number of worksite employees (WSEs) stayed about the same over prior year
- Gross profit for the 3rd quarter increased somewhat over prior year
- Operating income for the 3rd quarter stayed about the same over prior year
- Number of internal employees stayed about the same
- Number of clients stayed about the same
- Number of workers’ comp claims reported to carriers remained about the same
The National Association of Professional Employer Organizations (NAPEO) is the Voice of the PEO Industry, with a membership of 300 PEOs of all sizes and 250 industry service partners. PEOs provide payroll, benefits, regulatory compliance assistance, and other HR services to small and mid-sized companies. Through PEOs, the employees of small businesses gain access to employee benefits such as 401(k) plans; health, dental, life, and other insurance; dependent care; and other benefits typically provided by large companies. PEOs provide services to between 156,000 to 180,000 businesses employing between 2.7 and 3.4 million people and generate between $136 and $156 billion in gross revenues annually. For more information about the PEO industry and NAPEO, please visit www.napeo.org.