Employment growth in the professional employer organization industry is 14 times higher than the growth rate in the US economy overall, according to a new study released today by the National Association of Professional Employer Organizations at its annual conference in Phoenix. The 907 PEOs in the US combined to count a total of 174,545 clients in 2017, according to the study by economists Laurie Bassi and Dan McMurrer of McBassi and Associates.
The 3.7 million worksite employees employed by these PEOs earned a total of $176 billion in annual wages and represent 12.1% of all employment by private sector employers that have 10 to 99 employees — the size range of most PEO clients — and 2.4% of civilian employment in the US. Between 2008 and 2017, the number of worksite employees employed in the PEO industry grew at a compounded annual rate of 8.3%.
PEOs generate an estimated $136 to $152 billion in gross revenues, according to NAPEO.
“The numbers in this study reinforce the growing footprint of the dynamic PEO industry,” said NAPEO President and CEO Pat Cleary. “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.”