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Trends & Innovations

The PEO industry has never been static. Things are always happening—some good, some bad, some indifferent.

When enough of the same type of things are happening at the same time, it’s a trend. Right now, a lot of consolidation is happening in the PEO space.

This recent consolidation trend began after the 2008-2009 recession, spurred by increasing regulatory burdens placed on small business, the extensive amount of capital available combined with the PEO revenue model’s appeal to investors, the passage of the Small Business Efficiency Act in late 2014, and NAPEO’s industry visibility initiatives, among other things.

This ripe capital market for PEOs is not limited to funding consolidation. The strong economy, robust business growth, and low interest rates are continuing to create an abundance of capital. With it comes new business models, new growth plans, and new ideas for how technology is used.

That brings us to the increasing role of technology in the industry, which is also driven by client expectations. PEOs have had client and employee portals for self-service for a while, but with the consumerism of IT, the widespread use of apps, and the advent of the “customer experience,” PEOs are working to meet these new expectations by developing integrated technology platforms and rethinking how they use technology.

As these trends continue, they contribute to stronger PEOs and a stronger industry, which leads to more robust operational capabilities, more freedom to try new things, and an influx of ideas, which in turn leads to innovation.

However, it’s not automatic. The current environment can engender innovation, but PEOs have to pursue and nurture that creative spark. This can come from your staff, your clients, your peers, your competition, and even disruption.

A foretelling of things to come may be the fact that the PEO industry is continuing to mature as the generations of the digital age are becoming part of the business landscape.

The best part is that trends, innovations, and what comes next are greater than the sum of their parts. They can build on one another exponentially, and that can lead to a transformation of the industry.

Know More



Federal and State Legislative Measures Target ‘Surprise’ Balance Billing

In recent years, “surprise” balance billing by out-of-network healthcare providers has become an increasingly prevalent problem for group health plans, health insurers, and the employees and dependents covered under those plans. Disputes arising from this billing practice often impose financial and psychological burdens on patients and can present significant challenges for group health plans.


Understanding Today’s Workforce Can Give your PEO an Advantage

Ongoing low unemployment is great news for America’s workers, but more of a headache for America’s employers. Not only must they search to attract the best candidates, but they also have to consider how to hold on to the valuable labor force they currently employ. For small businesses, this can be especially difficult as they compete with larger employers with bigger budgets.


A Deeper Dive into Why Sales Don’t Close

In 1999, I wrote my first article for PEO Insider® and wondered how I would ever come up with enough ideas to develop another one. It’s almost impossible to believe I’ve been a PEO Insider author for 19 years and that this is my final contribution to this outstanding publication. So, after almost two decades, I have decided to “retire” from my role as PEO Insider author. This has truly been an honor and a labor of love. For my final article, I want to take a deeper dive into closing the sale. In the December 2016/January 2017 issue (available to members at, I wrote about closing in terms of how and where it should be incrementally incorporated into the sales process. Now, let’s examine how our actions as PEO sales professionals, whether by commission or omission, can negatively impact the closing of a sale. What creates situations in which we can’t close a particular deal, and worst of all, never understand why? This is frustrating from a monetary standpoint and it’s a lost opportunity to learn from our mistakes.


Inside Word

The Value of NAPEO Membership

I have been a NAPEO member for more than 20 years. Like most, I sometimes questioned the purpose of the organization, its leadership, and, most importantly, where my dues monies went. Over the years, I’ve had numerous discussions with believers and non-believers about the value of membership. I was raised to be a disciple of the concept “for the greater good of all,” but even I tend to test the veracity of that idea when I am asked to give in good faith.

NAPEO Notebook

Ohana Patrick J. Cleary

As I mentioned in this space last month, about six years ago, while we were casting about trying to decide on a location for our November Board of Directors meeting—a process that took far too much of everyone’s time—I had the idea to simplify things and hold this meeting in the city where our chair lived. That has seen us travel to West Palm Beach, Indianapolis, Detroit, and San Antonio, among other locales. When we hatched this plan, we didn’t know that Barron Guss of Simplicity HR by ALTRES in Hawaii would one day be chair. And so, as luck would have it this year (and no, that’s not why he was selected as chair…), off to Hawaii we went.

PEO Pulse

PEO Revenue Growth Headlines 3rd Quarter Pulse Survey

NAPEO’s Pulse Survey was developed by the Accounting Practices Committee in 2017 and is conducted quarterly among members to take the pulse of the PEO industry through a series of easy-to-answer questions. For more information about NAPEO’s Pulse Survey, please contact Melissa Viscovich at or 703/739-8161. The results of NAPEO’s Pulse Survey for the third quarter of 2018 show that the first three quarters of the year were good for PEOs in terms of growth.

Capitol Comment

The 2018 Congressional Elections Thom Stohler

In my last Capitol Comment column, written before the mid-term elections, I bravely stated that I had no idea how the 2018 congressional elections would turn out. However, I did hint that the Democrats were well-positioned to take control of the House and that the Senate was the only place where Republicans had any optimism. I can now boldly state that my hints were right on the mark: The Democrats have a solid 234-200 majority in the House (as of this writing) and the Republicans picked up two seats in the Senate, making their majority 53-45-2.

Legal Q&A

Payroll Fraud Updates, Holiday Parties, ACA Reporting Farrah L. Fielder, Esq.

Q. Are there any updates about PEO payroll fraud? A. At NAPEO HQ, we have gotten a lot of questions and comments since September about various payroll fraud schemes. A working group within the Accounting Practices Committee is putting finishing touches on a best practices document which should help...

Special Report

Department of Labor Issues Proposed Rule that Recognizes PEO-Sponsored Retirement Plans Thom Stohler

On October 22, 2018, the Department of Labor (DOL) issued a proposed rule to facilitate and expand the availability of multiple-employer defined-contribution plans (MEPs). In the proposed rule, the DOL specifically addresses how PEOs and trade associations are permitted to sponsor retirement plans. The proposed rule is similar to the DOL’s recently finalized Association Health Plan (AHP) regulation. However, where the AHP regulation did not mention PEOs, the proposed rule directly addresses the ability of PEOs to provide retirement benefits.

PEO Spotlight

Staffmark: Tammy Stone Chris Chaney

“I will always be a sales representative first—it’s in my blood,” said Tammy Stone. Vice president and general manager of Staffmark’s Cincinnati-based PEO division, Stone has many more responsibilities than sales, but it’s at the core of who she is as a businesswoman and leader. It’s how she got her start in the industry and is still what she loves doing most. To Stone, it’s all about the people. The interactions, partnerships, and relationships she has with clients make the job worth it.

The Big Picture

The Two-Gap Workforce Challenge Thomas J. Donohue

Our economy is rapidly being reshaped by technology and other forces that are creating opportunity as well as disruption—and with it, insecurity for many businesses and workers.  Much of this insecurity can be attributed to two gaps that are preventing our nation from leveraging its talent and people from realizing their potential. The first is a skills gap—too many people lack the skills or credentials necessary to compete for 21st century jobs. The second is a people gap—too many businesses can’t find the workers they need, when and where they need them. Closing both gaps is imperative to our competitiveness.

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