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New Economic Analysis Shows PEO Employment Growth is 14 Times Higher Than the Economy Overall

| 9/6/2018

Sept. 5, 2018, Phoenix, AZ — Employment growth in the professional employer organization (PEO) industry is 14 times higher than the growth rate in the U.S. economy overall, and the total employment represented by the PEO industry is the same as the combined number of employees for Walmart (U.S. only), Amazon, Google, Apple, IBM, FedEx, Starbucks, AT&T and Wells Fargo, according to a new study released today by the National Association of Professional Employer Organizations (NAPEO) at its annual conference in Phoenix.

The study, by noted economists Laurie Bassi and Dan McMurrer of McBassi and Associates, is the sixth in a series. Research conducted last year by Bassi and McMurrer showed higher revenue growth, increased profitability, and higher employee satisfaction for companies that use a PEO. Previous studies conducted by Bassi and McMurrer have shown that businesses in PEO arrangements grow faster, have lower employee turnover, and have a significantly higher rate of business survival than businesses that don’t use PEOs.

The new report also provides new definitive measures of the current size, scope, and footprint of the PEO industry. Data through the end of 2017 shows:

  • There are 907 PEOs in the United States.
  • PEOs employ 3.7 million worksite employees (WSEs).
  • Annual wages in the PEO industry are $176 billion.
  • 175,000 businesses partner with a PEO.

“The numbers in this study reinforce the growing footprint of the dynamic PEO industry. The outlook for continued growth and vibrancy is extremely bright for PEOs given the significant value proposition we offer to small and mid-size businesses: Faster growth, higher profitability, and happier employees,” said NAPEO President & CEO Pat Cleary. 

PEOs provide HR, payroll, benefits, workers’ comp, and regulatory compliance assistance to small and mid-sized companies. By providing these services, PEOs help businesses improve productivity, increase profitability, and focus on their core mission. 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. A copy of the full study is available here.


The National Association of Professional Employer Organizations (NAPEO) is The Voice of the PEO IndustryTM. NAPEO has some 250 PEO members that provide payroll, benefits, and other HR services to between 175,000 businesses employing 3.7 million people. An additional 200 companies that provide services to PEOs are associate members of NAPEO. For more information, please visit

Media Contact

Kerry Carruthers