| 7/11/2017
A new survey by the National Association of Professional Employer Organizations (NAPEO) shows that the PEO industry continued to grow in the first quarter of 2017. Industry executives also expect that that pattern will continue, with 96% reporting a likely increase in the number of worksite employees, and 41% forecasting a significant increase over the next twelve months. PEOs provide HR services to small and mid-sized businesses.
The quarterly survey, conducted in June 2017 by Industry Insights, also showed that PEO revenues, gross profits, operating income, and the average number of clients all increased in the first quarter of 2017, compared to the first quarter of 2016. The second survey in this series, conducted in February 2017, also showed those categories increased in the fourth quarter of 2016, compared to the fourth quarter of 2015.
It’s encouraging to see this survey confirm what we’ve known for some time: the PEO industry is on the rise,” said NAPEO President & CEO Pat Cleary. “PEO’s provide comprehensive HR solutions and expertise that most small and midsized business cannot afford. This explains why more and more businesses are turning to PEOs.”
A total of 45 PEO executives responded to the survey, which will be conducted each quarter. The typical responding PEO has 22 worksite employees per client. Survey respondents indicated the following:
- 1st quarter revenue increased significantly when compared to 1st quarter 2016
- 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 1st quarter increased somewhat over prior year
- Operating income for the 1st quarter increased somewhat over prior year
- Number of internal employees stayed about the same
- Number of clients increased somewhat
- Number of workers’ comp claims reported to carriers remained about the same
- Complete PEO Pulse Survey results.
About NAPEO:
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.