The Latest Peo Industry Statistics Explained
The global professional employer organization (PEO) market was valued at $15.57 billion in 2018.
The statistic regarding the global professional employer organization (PEO) market value of $15.57 billion in 2018 indicates the total estimated revenue generated by PEO services worldwide within that year. PEOs provide HR outsourcing services to businesses by managing employee-related tasks such as payroll, benefits administration, and compliance. The sizeable market value reflects the growing trend among businesses to streamline operations and reduce administrative burdens by outsourcing HR functions to PEOs. This statistic signifies the significance of PEOs in today’s corporate landscape and suggests a strong demand for their services in optimizing business efficiency and compliance with regulations.
In 2021, the industry is expected to grow at a CAGR of 11.3%.
The statistic that the industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 11.3% in 2021 indicates the projected annual average rate of growth over a specific time period. This means that if the industry continues to expand at this rate consistently each year, it is estimated to increase by 11.3% annually. CAGR is a useful metric for assessing the industry’s overall growth trajectory as it factors in compounding effects, providing a smoother and more accurate representation of growth compared to simple annual growth rates. The forecasted growth rate of 11.3% suggests a strong and steady upward trend in the industry’s performance for the year 2021.
The North American PEO market is projected to reach $1,094.63 billion by 2027.
The statistic indicates a projection for the size of the North American Professional Employer Organization (PEO) market, estimating that it will reach a value of $1,094.63 billion by the year 2027. A PEO is a company that provides comprehensive HR solutions to other businesses, such as payroll, benefits administration, and compliance assistance. The projected growth in the market suggests an increasing demand for outsourced HR services among businesses in North America over the coming years, likely driven by factors such as a focus on cost-efficiency, regulatory complexities, and a need for specialized expertise in managing workforce-related functions.
Between 2008 and 2017, the PEO industry grew at almost 15 times the rate of the overall economy.
The statistic indicating that the professional employer organization (PEO) industry grew at almost 15 times the rate of the overall economy between 2008 and 2017 suggests a substantial level of growth and expansion within the PEO sector during that period. This rapid growth rate implies that the PEO industry outpaced the general economic growth by a significant margin, indicating that PEO services were in high demand and experiencing a boom in business. The strong growth of the PEO industry relative to the overall economy may be attributed to factors such as increasing awareness of the benefits of outsourcing HR functions, cost efficiencies, improved compliance, and access to specialized expertise, all of which have driven businesses to seek PEO services to support their operations and focus on their core competencies.
PEOs serve between 175,000 small and mid-size businesses, employing 3.7 million people.
This statistic indicates the significant impact of Professional Employer Organizations (PEOs) in the United States, as they serve as a crucial resource for small and mid-size businesses. With approximately 175,000 businesses utilizing their services, PEOs collectively manage the employment of 3.7 million individuals. PEOs offer a range of HR services, such as payroll, benefits administration, compliance assistance, and risk management, allowing these businesses to outsource crucial functions and focus on their core operations. By partnering with PEOs, small and mid-size businesses can access resources and expertise typically available to larger corporations, leading to improved efficiency, compliance, and overall business success.
PEO clients grow 7-9 percent faster than those without PEO services.
This statistic indicates that businesses using Professional Employer Organization (PEO) services experience a growth rate that is 7-9 percent higher compared to businesses that do not utilize PEO services. PEOs offer comprehensive HR solutions, such as payroll, benefits administration, and compliance assistance, allowing companies to focus on their core operations and growth strategies. The higher growth rate observed among PEO clients suggests that leveraging PEO services can be beneficial in driving business expansion and success by streamlining HR processes and increasing operational efficiency.
PEO Industry’s Gross profits rose approximately 5.6% in 2021.
The statistic that the PEO (Professional Employer Organization) industry’s gross profits rose approximately 5.6% in 2021 indicates a positive trend in the financial performance of the industry compared to the previous year. This increase in gross profits suggests that the PEO industry experienced growth and generated more revenue from its operations in 2021. The rise in profits could be attributed to various factors such as increased demand for PEO services, operational efficiencies, cost management strategies, or market expansion. Overall, a 5.6% increase in gross profits is a significant indicator of the industry’s financial health and performance in the given year.
98% of business owners who are customers of PEOs would recommend one to a fellow entrepreneur.
This statistic indicates that 98% of business owners who currently utilize Professional Employer Organizations (PEOs) would highly recommend these services to other entrepreneurs. A PEO is a company that provides HR outsourcing services, such as payroll, benefits administration, and compliance assistance. The high recommendation rate suggests that these business owners are satisfied with the level of support and expertise they receive from the PEO, leading them to endorse its services to their peers in the entrepreneur community. This statistic not only highlights the positive impact PEOs can have on businesses but also serves as a strong validation of the value they bring to small and medium-sized enterprises.
By 2024, PEO New Jersey Industry revenue is anticipated to mark over 8% CAGR.
The statistic ‘By 2024, PEO New Jersey Industry revenue is anticipated to mark over 8% CAGR’ suggests that the revenue of the Professional Employer Organization (PEO) industry in New Jersey is expected to grow steadily at a compound annual growth rate (CAGR) of over 8% by the year 2024. This projection indicates a positive trend in the industry’s financial performance, implying that the PEO sector in New Jersey is likely to experience substantial revenue growth over the specified period. This anticipated growth rate may signal increased demand for PEO services, improved economic conditions, or enhanced efficiency and competitiveness within the industry, all of which could contribute to the overall expansion of the PEO sector in New Jersey in the coming years.
Florida had the largest share of the PEO market in 2016 with 16.8%.
In 2016, Florida accounted for 16.8% of the total Professional Employer Organization (PEO) market, making it the state with the largest share within the industry. This statistic indicates that a significant portion of PEO services, which involve companies outsourcing their HR functions to a specialized firm, were utilized within the state of Florida compared to other states in the US. The high market share in Florida suggests a strong demand for PEO services, potentially driven by factors such as the state’s business environment, regulatory framework, or the size and diversity of its business landscape. This statistic highlights Florida’s importance within the PEO industry and its attractiveness as a hub for such services.
The estimated market value of contract workers in the US PEO industry was $168 billion in 2017.
The statistic stating that the estimated market value of contract workers in the US Professional Employer Organization (PEO) industry was $168 billion in 2017 suggests a significant contribution of these workers to the overall economy. PEOs provide outsourced human resource services to businesses, enabling them to access a flexible workforce without the burden of managing administrative tasks. This large market value highlights the growing reliance on contract workers in various industries and the importance of PEOs in facilitating this arrangement. The statistic also indicates the scale of the PEO industry’s impact on the labor market and economy at large, emphasizing the evolving nature of employment relationships in contemporary times.
PEOs operate in all 50 U.S. states.
This statistic suggests that Professional Employer Organizations (PEOs) have a presence and operate in every state across the United States. This implies that PEOs offer their services and conduct business activities in all 50 states, demonstrating a widespread reach and potentially indicating a high level of industry coverage and competitiveness. Operating in all states can provide PEOs with a broad market base and the ability to serve clients nationwide, which may showcase their capacity to adapt to varying state regulations and requirements while offering HR and administrative services to organizations across the country.
The average client in the PEO market has around 22 co-employees.
The statistic “The average client in the PEO market has around 22 co-employees” refers to the average number of employees that a client company utilizing Professional Employer Organization (PEO) services typically has. This statistic suggests that companies utilizing PEO services tend to be of a moderate size, likely falling into the small to medium-sized business category. Having around 22 co-employees can indicate that these companies are not too small to handle the administrative complexities of HR and employment management on their own but are also not large enough to have a dedicated in-house HR team. This average number of co-employees gives insight into the typical profile of businesses that benefit from PEO services and helps understand the market segment that PEO companies cater to.
PEO customers are 50% less likely to go out of business.
The statistic ‘PEO customers are 50% less likely to go out of business’ indicates that businesses using Professional Employer Organizations (PEOs) are at a significantly lower risk of failing compared to businesses that do not utilize PEO services. Specifically, this statistic suggests that the probability of a PEO customer going out of business is half that of a non-PEO customer. This could be attributed to various factors such as the expertise and support provided by PEOs in areas like HR management, compliance, and employee benefits, which can help businesses operate more efficiently, reduce risks, and improve overall stability.
PEO employment represents between 2 and 12 percent of U.S. employment among small businesses.
This statistic indicates that Professional Employer Organization (PEO) employment accounts for a proportion ranging from 2% to 12% of total employment within small businesses in the United States. PEOs are entities that provide human resources services to small and medium-sized businesses, allowing them to outsource functions such as payroll, benefits administration, and regulatory compliance. The wide range of 2% to 12% suggests variability in the extent to which small businesses utilize PEO services for their workforce management needs. Factors such as industry type, company size, and geographical location likely contribute to the varying levels of PEO employment across small businesses in the U.S. This statistic underscores the importance of PEOs in supporting the HR needs of small businesses and highlights the diversity in their adoption among this sector.
The total employment represented by PEOs, is larger than the combined number of employees for Walmart, Amazon, IBM, FedEx, Starbucks, AT&T, Wells Fargo, Apple, and Google.
This statistic implies that the total employment facilitated by Professional Employer Organizations (PEOs) collectively exceeds the combined number of employees working for prominent companies like Walmart, Amazon, IBM, FedEx, Starbucks, AT&T, Wells Fargo, Apple, and Google. This comparison sheds light on the significant role that PEOs play in the labor market, serving as a centralized entity that manages human resources for multiple client companies. The fact that PEOs handle more employees than such well-known corporate giants underscores their impact on workforce management and employment practices, suggesting that many businesses rely on PEOs to handle their HR functions efficiently.
15% of all employers with 10 to 99 employees use a PEO.
The statistic ‘15% of all employers with 10 to 99 employees use a Professional Employer Organization (PEO)’ indicates the proportional representation of businesses within the specified size range that have opted to utilize the services of a PEO. PEOs provide services such as payroll administration, employee benefits, HR management, and compliance assistance, allowing businesses to outsource these tasks and focus on their core operations. The fact that 15% of employers in this size category utilize a PEO suggests a moderate level of adoption within this market segment, potentially driven by a desire to streamline operations, enhance compliance, and access expertise that may not be available in-house.
Clients of PEOs report 23 to 32 percent lower employee turnover.
The statistic “Clients of PEOs report 23 to 32 percent lower employee turnover” suggests that businesses working with Professional Employer Organizations (PEOs) experience significantly reduced turnover rates among their employees compared to businesses that do not utilize PEO services. This indicates that PEOs play a beneficial role in enhancing employee retention within organizations, possibly through their expertise in HR management, employee engagement strategies, and overall support in creating a positive work environment. The statistical range of 23 to 32 percent lower turnover implies a substantial impact that PEOs can have on reducing the costs and disruptions associated with high turnover rates in businesses, ultimately leading to enhanced workforce stability and productivity.
References
0. – https://www.www.prnewswire.com
1. – https://www.www.gminsights.com
2. – https://www.www.napeo.org
3. – https://www.www.peospectrum.com
4. – https://www.www.fortunebusinessinsights.com
5. – https://www.www.globenewswire.com
6. – https://www.www.staffingindustry.com
